NEW YORK – Shares falter as negotiations begin on Wall Street as hopes of a pre-election economic stimulus package faded further and cases of the virus continued to rise. The S&P 500 changed little after the first few minutes of trading on Tuesday, while the Dow Jones Insustrial Average edged down. Drugmaker Eli Lilly collapsed early on after reporting much lower profits than analysts expected. The company said it still supports a possible treatment for COVID-19 despite research showing it may not be effective in hospital patients. European markets fell and yields on Treasuries fell.
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Shares slipped in Europe and Asia on Tuesday after the surge in coronavirus cases and waning hopes for a U.S. economic recovery gave Wall Street its worst day in a month.
Stock indices fell in Paris, London, Hong Kong, Sydney and Seoul. Tokyo was flat. Shanghai has recovered from its first losses to recover.
Overnight, the S&P 500 fell 1.9%, worsening its losses from last week. The stocks of companies hardest hit by the pandemic have seen some of the biggest losses. Cruise lines, airlines and energy stocks have plummeted along with crude oil prices.
Another sign of caution, Treasury bond yields retreated after hitting their highest level since June last week and stabilized at 0.80% on Tuesday.
Unease over possible economic disruption due to a resurgence of COVID-19 outbreaks added to the uncertainties with the US presidential vote in a week’s time.
Doubts grow that Washington will succeed in stimulating the economy ahead of November 3 election day after House of Commons Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a deal to send money to most Americans and restart supplementary benefits for laid-off workers and provide assistance to schools, among others
The German DAX lost 0.3% to 12,136.88 while the CAC 40 in Paris fell 0.6% to 4,786.86. In Great Britain, the FTSE 100 lost 0.% to 5,775.35. US futures were little changed, with the Dow industrials contract stable and the S&P 500 up less than 0.1%.
The number of coronaviruses is increasing across much of the United States and Europe, raising concerns of further damage to still weakened economies. In Europe, the Spanish government has declared a national state of emergency which includes an overnight curfew, while Italy has ordered restaurants and bars to close every day at 6 p.m. and to close gyms, swimming pools and cinemas.
The gloom continued in Asia, where Japan’s Nikkei 225 was almost unchanged at 23,485.80. The Hang Seng in Hong Kong slipped 0.5% to 24,787.19. South Korean Kospi was down 0.6% to 2,330.01, while the S & P / ASX 200 fell 1.7% to 6,051.00. The Shanghai Composite Index recovered from its early losses, rising 0.1% to 3,254.32.
Indian Sensex was up 0.5% to 40,352.94.
South Korea posted better-than-expected 1.9% quarter-on-quarter economic growth in the last quarter, following a quarterly decline of 3.2% in April-June. On an annual basis, the economy contracted 1.3%, compared to expectations of a 1.8% decline according to FactSet. Strong exports drove the rebound, economists said.
Overnight, the S&P 500 fell to 3400.97, while the Dow fell 2.3%, to 27,685.38. The Nasdaq composite lost 1.6% to 11,358.94. Smaller company stocks also suffered heavy losses, pushing the Russell 2000 Index down 2.2% to 1,605.21.
The US economy has recovered somewhat since the loosening of home support restrictions that swept the country earlier this year. Economists expect a report released on Thursday to show it rose at an annual rate of 30.2% in the summer quarter after declining 31.4% in the second quarter.
But momentum has slowed after a series of additional unemployment benefits and other stimulus packages approved by Congress expired earlier this year.
Oil prices stabilized on Tuesday, with benchmark US crude gaining 17 cents to $ 38.73 a barrel in electronic trading on the New York Mercantile Exchange. It slipped from $ 1.29 to $ 38.56 on Monday. Brent crude, the international standard, picked up 19 cents at $ 41.00 a barrel.
This week is the busiest of the quarter’s earnings season, with more than a third of companies in the S&P 500 index due to report. Along with Amazon and Apple, Ford Motor, General Electric and Google’s parent company Alphabet are also on the program.
Across the S&P 500 as a whole, earnings reports for the summer were mostly better than Wall Street feared, although they are still on track to be more than 16% below levels in the past. ‘one year ago.
In currency trading, the dollar bought 104.78 Japanese yen, compared to 104.86 on Monday night. The euro weakened to $ 1.1804 from $ 1.1811.