Stocks slide as coronavirus angst lingers, U.S. stimulus underwhelms
See you April Joyner
NEW YORK (Reuters) - Ongoing concerns about a new variant of COVID-19 in the UK weighed on global stocks on Tuesday, sending euro, pound sterling and US Treasury bond yields lower.
The U.S. benchmark index S&P 500 ended up in troubled trading despite the U.S. Congress passing a $ 892 billion bailout package as investors weighed the possibility of further economic disruption from the coronavirus.
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"The unfortunate truth is that we have been hit by this mutant virus from the UK and now you have a loophole as the market looks ahead in the short term," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Some investors said the fiscal stimulus had already been priced into US stocks while other observers found the package unconvincing.
"There was likely to be hope that there would be something bigger," said Michael Purves, managing director of Tallbacken Capital Advisors. "There's a good chance the economy will need another package."
Weak US economic data, including existing home sales and a consumer confidence index, also dragged stocks and gave the dollar a boost.
US equities sluggishness offset a rebound in European equities that faltered on Monday amid mounting concerns over new coronaviruses. Progress on a trade agreement between the European Union and the UK helped raise the pan-European STOXX index, which rose 1.18%. The STOXX posted its largest one-day percentage increase in more than five weeks.
The MSCI index of global equities slipped as a result of the performance of US stocks. It fell 0.14%.
On Wall Street, the Dow Jones Industrial Average fell 200.94 points, or 0.67%, to 30,015.51, the S&P 500 fell 7.66 points, or 0.21%, to 3,687.26, and the Nasdaq Composite was down 65 .40 points or 0.51% at 12,807.92.
U.S. Treasury bond yields also fell as investors weighed the likelihood of increased lockouts in response to the new COVID-19 variant. The benchmark 10-year Treasury note was last up 6/32, returning 0.9213% from 0.941% late Monday.
In terms of currencies, the euro and pound fell, in part on expectations that such restrictions could weaken Europe's economic prospects. On Monday, countries around the world closed their borders with the UK because they were afraid of the new variant.
The euro last fell 0.69% to $ 1.2163 while the pound fell 0.85% to $ 1.3357.
Risk sentiment in the currency markets supported the dollar index, which rose 0.55%. Even so, the index was on track for the third quarter in a row.
The oil markets also reflected ongoing concerns about the new variant of the coronavirus. Brent fell 1.6% to $ 50.08 a barrel while U.S. crude fell nearly 2% to $ 47.02 a barrel.
Still, some investors were hoping for a strong economic recovery in 2021, as vaccines against the new variant of COVID-19 were expected to be effective.
The new mutation "is an obstacle in the road, but that road is still leading to a much stronger recovery in the second half of next year," said Hugh Gimber, global market strategist at J.P. Morgan Asset Management.
(Reporting by April Joyner; additional reporting by Tom Wilson in London and Stephen Culp in New York; editing by Philippa Fletcher, Alistair Bell and Richard Chang)
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