Dow battered by 1,000 point slide, S&P nears bear market
Buy airline stocks despite oil-price drop: US Global Investors CEO
U.S. Global Investors CEO Frank Holmes discusses why airline stocks are a good buy.
U.S. equity markets fell sharply Wednesday amid doubts over the effectiveness of proposed stimulus measures to combat the economic uncertainty caused by the outbreak of the new coronavirus.
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The Dow Jones Industrial Average was lower by nearly 1,000 points, or 3.9 percent, in the opening minutes of trading while the S&P 500 and Nasdaq Composite were down 3.4 percent and 3.1 percent, respectively.
The early selling comes after the major averages all gained close to 5 percent Tuesday as President Trump floated a payroll tax cut and other fiscal measures to buoy the U.S. economy.
|I:DJI||DOW JONES AVERAGES||24255.22||-762.94||-3.05%|
|I:COMP||NASDAQ COMPOSITE INDEX||8112.930276||-231.32||-2.77%|
Looking at stocks, airlines are in focus after American, Delta and United on Tuesday cut more domestic and international flights amid a wave of cancellations. Cruise operators and online travel-booking companies were also trending down.
|AAL||AMERICAN AIRLINES GROUP INC.||15.89||-1.11||-6.53%|
|DAL||DELTA AIR LINES INC.||42.10||-3.37||-7.41%|
|UAL||UNITED AIRLINES HLDG.||49.03||-3.53||-6.72%|
|BKNG||BOOKING HOLDINGS INC.||1,505.69||-53.31||-3.42%|
Elsewhere, Nike shares fell after rivals Adidas and Puma warned their sales in China took a hit due to COVID-19.
|PUMSY||PUMA SE UNSP ADR EA REP 0.1 ORD SHS||7.35||+0.72||+10.90%|
Meanwhile, some pharmaceutical companies looking for COVID-19 treatments were rocketing higher.
Volatility continues in the oil market, with West Texas Intermediate crude oil down 3 percent at $33.33 a barrel. The energy component gained more than 10 percent on Tuesday.
The plunge in oil prices is weighing on majors ExxonMobil and Chevron, as well as Continental Resources and Chesapeake Energy, which is seeking shareholder support for a reverse stock split.
|XOM||EXXON MOBIL CORPORATION||42.28||-1.12||-2.59%|
|CHK||CHESAPEAKE ENERGY CORP.||0.15||-0.01||-8.17%|
Bank are also under pressure as the one-two punch of weaker economic activity due to COVID-19 and plunging oil prices remains a drag.
|JPM||JP MORGAN CHASE & CO.||97.13||-3.57||-3.55%|
|BAC||BANK OF AMERICA CORP.||22.89||-0.71||-3.03%|
|RF||REGIONS FINANCIAL CORPORATION||10.90||-0.57||-4.97%|
U.S. Treasurys rallied, pushing the yield on the 10-year note down 5.6 basis points to 0.696 percent.
European markets gained after the Bank of England announced an emergency rate cut of 50 basis points, lowering its key interest rate to 0.25 percent. Britain’s FTSE was up 0.4 percent while Germany’s DAX and France’s CAC gained 0.8 percent and 1 percent, respectively.
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Asian markets were lower across the board with Japan’s Nikkei falling 2.3 percent, China’s Shanghai Composite shedding 0.9 percent and Hong Kong’s Hang Seng sliding 0.6 percent.
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