On Wednesday, there was a sharp fall witnessed in the U.S. stocks. The striking increase in coronavirus infections led to another volatile impact on the global economy.
The Dow Jones Industrial Average was noted to plunge down to its fourth straight negative session at 26,519.95 after a drop of 943.24 points, or 3.4%. Similarly, the S&P 500 declined by 3.5%, and the tech-heavy Nasdaq Composite fell by 3.7%. The most significant fall was witnessed at the 30-stock Dow, which slid by 6.4%, marking its highest drop since March. The majority of the top-ranked U.S. stock indexes suffered their worst day since June when the virus was at its peak.
Similarly, there was a corresponding fall noticed in the European stock market indexes as well. The German Dax slid by 4.2% to its lowest level since the rise of the coronavirus pandemic; whereas, the French CAC 40 fell by 3.4%.
While the condition of the stock market remains uncertain, investors around the world are hoping that the pandemic would not further force mitigation measures, as the global economy is continuously being pushed back into an unproductive state, with little to no consumption.
As the coronavirus cases increase by the day in the U.S., there is very high uncertainty in the market. The recent uptick has forced the U.S. government to reinstate lockdown and social distancing measures. The state of Illinois has passed orders to shut down indoor dining and clubs in Chicago. Similarly, Europe has seen the same fate. The German government has imposed a partial lockdown for the coming four-weeks, while the French government has initiated restrictions around the country until the beginning of December.
With these new restrictions and measures being put in place, there is a spike in the U.S. stock market for travel companies already. United Airlines has witnessed its stocks falling by 4.6%, whereas the Royal Caribbean slid down around 7.4%. Carnival saw a massive fall at 10.6%, leading to heavy losses, just in one day.
The Earning Season is Under Fire
Regardless of the coronavirus pandemic, there are some companies that are thriving like never before. With the latest batch of corporate earnings, Microsoft reportedly had a rise in their profits and revenue, both of which were not anticipated for. While the rise was mainly due to the cloud business, the overall stocks of the company dipped around 5.1%. However, the positive revenue is enough to help the company afloat till the next quarterly.
Similarly, General Electric saw an unexpected gain of around 4.5%. For the first time since the beginning of the coronavirus pandemic, the company witnessed stronger revenues than its forecasted revenues.
In contrast, Boeing reported a hefty quarterly loss, with shares dipping by 4.6%. To keep up with the ambiguity, the company has decided to cut thousands of additional jobs by 2021.
The director of Portfolio Strategy at Verdence Capital Advisor, Megan Horneman, analyzed the current market situation and stated it to be doing much better than expected. He said, “Broadly speaking, earnings this season are coming in better than expected.” He continued to advise companies to give reliable guidance as a form of reassurance to their investors to ensure a stronger position in the market.
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.
