Dow slides but tech stocks outperform as Europe’s COVID struggles rattle markets

Stocks traded mixed on Friday, as growing concerns over nationwide COVID-19 lockdowns in Europe raised fears about new restrictions beyond the continent.

The Dow slid 200 points, or 0.6%, while the S&P 500 rose 0.1%, but the Nasdaq composite added 0.2%, bolstered by rallying technology shares. 

Markets were unsettled after the Austrian government announced a full lockdown starting on Monday, in response to cases of COVID-19 surging in Europe. The lockdown will include both those vaccinated and unvaccinated, it will last for 10 days minimum, but could be extended for 10 days further.

“The news is hitting European markets hard this morning as fears mount that the virus and restrictions will spread across the continent again,” said Jim Reid, chief economist at Deutsche Bank, adding that “the curveball might be the U.S.” given lower rates of vaccination domestically than in Europe.

“So although all the headlines are in Europe at the moment, will the U.S. be more vulnerable than many European countries over the course of the full winter? Recent history suggests the U.S. have a higher bar for economic restrictions related to covid but it also has a lower vaccination rate than their European peers,” he added.

The Nasdaq was boosted by a jump in stocks associated with the “stay-at-home” trade that characterized much of 2020. Treasury yields, which have jumped in response to rising inflation fears, retreated early Friday as investors flocked to safe-haven assets. Brent crude (CL=F) sank by over 3%, reflecting jitters that lockdowns will curb energy demand.

Meanwhile, shares of air carriers Delta Air Lines, United Airlines and American Airlines, and cruiseliners Carnival Corp and Norwegian Cruise Line fell between 1.4% and 2.3%. 

And with the holiday season approaching and cold weather driving more people to meet indoors, public health officials are hoping to mitigate another COVID wave of cases this winter. The FDA on Friday authorized boosters of Pfizer/BioNTech and Moderna COVID-19 vaccines for all adults. 

The U.S House of Representatives on early Friday passed President Joe Biden’s $1.75 trillion bill, however the legislation will be sent to the Senate where negotiations will continue. The bill lays out the Administration’s plans on education, healthcare and the climate.

Also in focus for the markets is Biden’s Federal Reserve chair nomination. Biden told reporters on Tuesday to expect the announcement of a nominee for Fed chair in “the next four days.” The White House has not indicated which way it is leaning, but market participants see two leading options: the reappointment of current chair Jerome Powell, or the elevation of Fed Governor Lael Brainard.

“The market so far is believing that it will be Powell again, but any sort of a change would mean that they want to hear a reiteration of the monetary policy and forward expectations,” Sonali Pier, Pimco’s Managing Director and Portfolio Manager, told Yahoo Finance Live on Thursday.

“[That means] tapering, being at a pace of about $10 billion in treasuries, $5 billion in agency MBS, then thereafter seeing rate hikes but not a significant shift to be more hawkish,” Pier added.

With earnings season ongoing, Foot locker (FL) shares lost ground Friday, even after the athletic shoe and apparel retailer said it expects global supply-chain issues to persist through this quarter. Intuit (INTU) shares soared by over 12% after the financial-software company’s top and bottom lines both beat analysts’ expectations, and hiked its full-year revenue guidance for 2021 to $1 billion.

12:53 p.m. ET: The Dow Slides, Tech Outperforms

Here’s where markets were trading midday on Friday:

  • S&P 500 (^GSPC): +8.730 (+0.18%) to 4,714.09

  • Dow (^DJI): -318.12 (-0.39%) to 35,732.83

  • Nasdaq (^IXIC): +109.71 (+0.67%) to 16,101.90

  • Crude (CL=F): -$3.01 (-3.81%) to $76.00 a barrel

  • Gold (GC=F): -$12.50 (-0.67%) to $1,848.90 per ounce

  • 10-year Treasury (^TNX): -0.4bps to yield 1.543%

9:30 a.m. ET: Stocks mixed, tech leads Nasdaq higher

Here’s where markets were trading shortly after market open on Friday:

  • S&P 500 (^GSPC): -6.33 (-0.13%) to 4,698.21

  • Dow (^DJI): -214.78 (-0.60%) to 35,656.17

  • Nasdaq (^IXIC): +39.95 (+0.28%) to 16038.10

  • Crude (CL=F): -$1.51 (-1.91%) to $77.50 a barrel

  • Gold (GC=F): -$4.20 (-0.23%) to $1,857.20 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.6040%

7:30 a.m. ET Friday: Stock futures poised for mixed start

Here’s where markets were trading Friday morning:

  • S&P 500 futures (ES=F): -11.75 points (+0.25%), to 4,689.75

  • Dow futures (YM=F): -194 points (-0.54%), to 35,619.00

  • Nasdaq futures (NQ=F): +54.75 points (+0.33%) to 16,536.00

  • Crude (CL=F): -$2.65 (-3.35%) to $76.36 a barrel

  • Gold (GC=F): +$1.90 (+0.10%) to $1,863.30 per ounce

  • 10-year Treasury (^TNX): -0.5 bps to yield 1.529%

6:28 p.m. ET Thursday: Stock futures open higher

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): +0.5 points (+0.11%), to 4,706.50

  • Dow futures (YM=F): and +33 points (+0.09%), to 35,844.00

Nasdaq futures (NQ=F): +22 points (+0.13%) to 16,503.50

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

Minnie Arwood

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