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Wednesday’s 943 point drop is the worst sell off in months, following tons of global issues. Here’s why this day was so hard on the market.
Wednesday’s 943 point drop is the worst sell off in months, following tons of global issues. Here’s why this day was so hard on the market.
Garrett H.
The US stock market cratered on Wednesday following a spike in COVID cases and increased lockdowns globally.
The S&P 500’s 1.9% drop marks the highest drop since September 23rd, while the Dow Jones Average’s decline of 3.4% was the largest single day drop since June 11th.
US indexes followed declines in European exchanges, such as the German Dax, down 4.2%, and the French CAC down 3.4%.
Recent upticks in COVID-19 cases across the globe have recently brought some health and company issues into forefront recently, especially across Europe and the United States.
The US met a new high of COVID cases, at over 80,000 daily cases, and Europe has been reaching new highs all across the continent.
CNBC’s Jim Cramer said “(he) think(s) there’s going to be a call for lockdowns the likes of which we’re seen in Chicago.”
While stimulus talks were recently in focus, US President Trump has refused to allow much negotiations, focusing on the price of stimulus, ignoring the thousands of people dying in the US.
Past stimulus helped to boost citizens, companies, and the stock market in general, but current stimulus might not happen, at least for a few months.
Stocks that were hurt most by this drop included travel stocks, such as United Airlines, down 4.6%, Royal Caribbean, down 7.4%, Norwegian Cruise Line, down 9.1%, and Carnival down 10.6%.
The VIX, or Volatility Index, jumped above 40 and met its higher level in months.
General Electric reported stronger revenues than forecasts, as well as a surprise profit, giving the stock a 4.5% boost on Wednesday.
Microsoft beat earnings and revenue estimates, assisted by cloud business growth. Even with growth and breaking forecasts, the stock managed to drop 5%, due to light guidance.
Boeing reported a smaller than expected quarterly lost, but announced their plan to cut thousands of jobs through 2021, adjusting to long-term issues with the business. Shares dropped over 4% Wednesday.
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