Despite Major Drop in Chinese Stock Market, US and Europe Rebound... Dow Up 0.5% (Comprehensive)

[Asia Economy New York=Correspondent Baek Jong-min, Reporter Naju-seok] The US stock market overcame the plunge in the Chinese stock market and succeeded in rebounding. Oil prices continued to weaken, entering the $40 range during the session, signaling a correction phase.

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On the 3rd (Eastern Time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 143.78 points (0.51%) to close at 28,399.81, the S&P 500 index increased by 23.40 points (0.73%) to 3,248.92, and the Nasdaq rose 122.47 points (1.34%) to finish at 9,273.40. Although the New York stock market ended January in a downtrend, it successfully started February with gains.

Earlier, the Chinese stock market closed at 2,746.61, down 7.72% (229.92 points) from the previous trading day due to fears of the novel coronavirus infection (Wuhan pneumonia), but this did not spread to the US and European stock markets.

On this day, the market was closely watching the novel coronavirus situation, economic indicators, and the US Democratic Iowa caucus. The Shanghai stock market, which reopened after a holiday, plunged but maintained a positive trend amid favorable economic indicators.

The US Institute for Supply Management (ISM) announced that the US January Manufacturing Purchasing Managers' Index (PMI) rose to 50.9 from 47.8 in the previous month. This exceeded expectations and indicated that manufacturing shifted from a contraction phase since August last year to an expansion phase.

Political influence cannot be ruled out ahead of the Iowa caucus, the starting point of the US presidential race. Recently, Wall Street has increasingly viewed Senator Bernie Sanders' strength as negative for the stock market. Some analyses suggest that the recent weakness reflects both the novel coronavirus and Sanders' rise.

The highlight of the market on this day was undoubtedly the electric vehicle company Tesla. Tesla's stock price surged 19.9% to reach $780. The price increase was attributed to a securities firm raising Tesla's target price to $808.

European stock markets also rebounded.

The pan-European Euro Stoxx 50 index rose 0.56% to 3,661.27. The German stock market increased by 0.49%, the French stock market by 0.45%, and the UK stock market by 0.55%, respectively.

The rebound in the US and European stock markets despite the plunge in the Chinese stock market is believed to be because the Chinese market had been closed for a long time due to the Lunar New Year holiday, reflecting the impact of the novel coronavirus all at once with a sharp drop, but the global stock markets had already factored in the shock.

The 10-year US Treasury yield rose slightly, somewhat weakening the preference for safe-haven assets. On the New York Mercantile Exchange, April gold futures closed down 0.4% ($5.50) at $1,582.40 per ounce.

Oil prices have not escaped the impact of the novel coronavirus. On the New York Mercantile Exchange (NYMEX), March West Texas Intermediate (WTI) crude oil futures fell sharply by 2.8% ($1.45) to close at $50.11 per barrel compared to the previous trading day.

Although prices fell to the $49 level during the session, they barely held above $50 after news emerged that the Organization of the Petroleum Exporting Countries (OPEC) is considering production cuts. The Wall Street Journal reported that WTI has fallen 20% compared to early January, entering a correction phase.

This content was produced with the assistance of AI translation services.