Dow tumbles 257 points as spike in COVID-19 cases spurs economic-recovery concern

wall street new york stock exchange
Traders work on the floor of the New York Stock Exchange.

  • The S&P 500 and the Dow Jones Industrial Average suffered their second straight losses on Tuesday.
  • COVID-19 cases worldwide have risen by more than 10% over the past week.
  • Nike dropped on the Dow but IBM was a winner.
  • See more stories on Insider’s business page.

US stocks dropped Tuesday, with their grip on record highs further loosening as investors worry about the prospects for global economic growth as COVID-19 cases worldwide increase.

The S&P 500 and Dow Jones Industrial Average each fell for a second consecutive session, pulling back from last week’s strongest finishes on record.

As “stocks fall on back-to-back days for the first time this month, you can probably blame an old culprit: COVID,” said JJ Kinahan, chief market strategist at TD Ameritrade, in comments sent to Insider.

Here’s where US indexes stood at 4 p.m. on Tuesday:

Cumulative coronavirus cases worldwide have risen by more than 10% over the past week, according to data from Johns Hopkins University, and cases topped 142.3 million on Tuesday. Officials in Japan were considering declaring a virus state of emergency, and the UK imposed a travel ban for visitors from India as that country becomes the new epicenter of the outbreak behind the US. Argentina, meanwhile, is battling another wave of cases.

“Higher-than-expected earnings might not be packing as big a punch as normal, partly because analysts had been raising their earnings estimates before earnings season began,” Kinahan said. “At this point, it’s really more about what companies forecast and less about what happened in Q1.”

IBM shares rose and performed the best among the Dow industrials after the technology company’s first-quarter earnings and revenue beat Wall Street’s targets. But fellow Dow component Nike dropped sharply following a Citi downgrade to neutral from buy on concerns that recent boycotts in China will hurt sales at the athletic wear maker.

Apple shares were lower. The company at its virtual event on Tuesday unveiled, among other products, its AirTags tracking accessory.

Around the markets, Johnson & Johnson shares rose after the company planned to resume COVID-19 vaccine shipments to the European Union.

GameStop stake held by Alaska’s revenue department soared by more than 700% last quarter. Alaska also said its Tesla bet had grown to $85 million in 18 months.

Bitfarms, a Canadian bitcoin-mining company, is planning a new mining site in Argentina that it said would be its largest yet.

Gold rose 0.3%, to $1,776 per ounce. Long-dated US Treasury yields fell, with the 10-year yield down to 1.56%.

Oil prices rose. West Texas Intermediate crude lost 1.2% to $62.61 per barrel. Brent crude, oil’s international benchmark, fell 1%, to $66.51 per barrel.

Bitcoin rose to $56,524.

Read the original article on Business Insider

Something weird just went down in the stock market, and Wall Street is speculating it’s the result of a fund liquidation

Trader
Traders work during the closing bell at the New York Stock Exchange (NYSE) on March 18, 2020 at Wall Street in New York City

  • A selling spree on Wall Street erased $35 billion from the values of stocks of major companies Friday.
  • The selloff appears to be in part the result of the “forced liquidation of positions” held by Archegos Capital Management, CNBC reported.
  • Goldman Sachs liquidated $10.5 billion worth of stocks in block trades, Bloomberg reported.
  • See more stories on Insider’s business page.

A selling spree erased $35 billion from the stock values of major Chinese tech and US media companies Friday, and Wall Street is speculating it was in part driven by the forced liquidation of an investment firm’s holdings.

Shares of ViacomCBS and Discovery fell as much as 35% Friday, while US-listed shares of China’s Baidu, Tencent Music, Vipshop and others also plunged this week. The selloff came as the broader US market ended the week higher, with the Dow closing up over 450 points, buoyed by optimism over the pace of coronavirus vaccinations.

The selloff in the Chinese internet ADRs and US media shares was in part due to the “forced liquidation of positions” held by Archegos Capital Management, CNBC reported, citing a source familiar with the situation.

Archegos describes itself as a family investment office focusing on equity investments primarily in the US, China, Japan, Korea and Europe. Archegos is run by Bill Hwang, the founder of the now defunct Tiger Asia Management. Hwang’s fund is “known for employing leverage,” IPO Edge reported.

The group did not immediately respond to Insider’s request for comment and its website appeared to be offline on Saturday.

Goldman Sachs and Morgan Stanley liquidated large holdings this week, the news site IPO Edge was first to report, adding that the two investment banks have ties to Archegos. The move likely came after Archegos was unable to meet a margin call by an investment bank, CNBC and IPO Edge reported, citing sources familiar with the matter.

Bloomberg reported Saturday that Goldman Sachs liquidated $10.5 billion worth of stocks in block trades, where banks look to find buyers for big stock positions. The block trades included $6.6 billion worth of shares of Baidu, Tencent and Vipshop before the US market opened on Friday morning, Bloomberg reported, citing an email to clients.

Goldman then sold $3.9 billion worth of shares in media giants ViacomCBS and Discovery, as well as luxury fashion retailer Farfetch, and others, according to the report.

Goldman Sachs did not immediately respond to Insider’s request for comment.

Morgan Stanley also led share offerings on behalf of an undisclosed shareholder or shareholders, Bloomberg reported. Some of the trades exceeded $1 billion in individual companies, Bloomberg reported, citing its own data.

Read the original article on Business Insider