[New York Stock Market] Dow down 0.76% and Nasdaq up 0.07% amid Delta variant concerns... Nasdaq hits another all-time high

by Kwon Jaehee

Published 08 Sep.2021 06:05(KST)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The New York stock market closed mixed on the first trading day after the Labor Day holiday amid concerns over the COVID-19 Delta variant.

On the 7th (Eastern Time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 0.76% (269.09 points) from the previous session to close at 35,100.00.

The Standard & Poor's (S&P) 500 index also closed down 0.34% (15.40 points) at 4,520.03 compared to the previous session. However, only the Nasdaq index rose 0.07% (10.81 points) to close at a record high of 15,374.33.

The Nasdaq index set a new all-time high again on the day, following its record close on the 3rd, the previous trading day. The New York stock market was closed the day before due to the Labor Day holiday.

Investors focused on news related to COVID-19.

The August employment report released last week fell significantly short of market expectations, spreading concerns that the Delta variant is having a greater economic impact than anticipated.

According to The New York Times (NYT), as of the 6th, the cumulative number of COVID-19 cases in the U.S. surpassed 40 million due to the spread of the Delta variant. The daily average of new cases was 132,135, down about 12% from two weeks ago, but daily hospitalizations rose about 8% to 101,747. The daily death toll also increased by 31% to 1,385 compared to two weeks ago.

Some regions' data were missing during the Labor Day holiday period, raising concerns that the spread of COVID-19 could further accelerate due to the holiday.

Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said in a CBS interview on the 5th that only the Pfizer vaccine is expected to be ready by the 20th, when COVID-19 booster shots are set to begin.

While Pfizer is expected to receive FDA approval based on related data before the booster shot rollout, Moderna is anticipated to take more time to gather and review the necessary data.

Goldman Sachs also influenced the market by lowering its U.S. fourth-quarter GDP growth forecast from 6.5% to 5.5%, and its full-year U.S. growth forecast from 6.0% to 5.7%.

Goldman Sachs cited the spread of the Delta variant and the exhaustion of government stimulus measures as reasons for the lower-than-expected growth.

Morgan Stanley downgraded its investment rating on U.S. stocks to 'underweight.'

Bitcoin prices also plunged on the day. Although El Salvador became the first country in the world to recognize the cryptocurrency Bitcoin as legal tender starting that day, Bitcoin prices dropped more than 10% due to reports of trading delays at major exchanges.

News emerged that 'Chivo,' the Bitcoin wallet app operated by the El Salvador government, temporarily suspended use due to server overload, and major exchanges like Coinbase experienced delays or cancellations in trading due to increased traffic.

By sector, industrials, utilities, real estate, and consumer staples stocks declined, while telecommunications, consumer discretionary, and technology stocks rose.

Boeing's stock fell about 2% following reports that deliveries of its main model, the 787 Dreamliner, would be delayed.

The Wall Street Journal (WSJ), citing sources, reported that Boeing will be unable to deliver the 787 Dreamliner to customers until at least the end of October.

Coinbase shares dropped more than 4% amid the Bitcoin price decline.

Match Group shares rose more than 7% on news that it will be included in the S&P 500 index as of September 20.

New York market experts analyzed that concerns over economic slowdown due to the spread of the Delta variant are being priced in.

Bill Zels, Global Chief Investment Officer (CIO) at HSBC Private Bank, told the WSJ, "People are witnessing an economic slowdown and somewhat uncertain outlook. Accordingly, it is natural that people are reluctant to jump into the market and invest."

He added, "There are reasonable concerns about the Delta variant, China and global growth, and inflation, and it is natural that people want more certainty."

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) rate futures market reflects a 3.5% chance of a 25 basis point rate hike by March next year.