Stocks Drop on Coronavirus Spread; Treasuries Jump: Markets Wrap

(Bloomberg) -- U.S. equities slumped on concern that a resurgence in coronavirus cases will derail the comeback for the world’s biggest economy. Oil dipped below $40 a barrel and Treasuries jumped.

Financial companies were among the worst performers on the S&P 500 Index as Wells Fargo & Co. prepared to cut thousands of jobs because of the pandemic. The Dow Jones Industrial Average’s loss exceeded 1.3% as Boeing Co. dropped. The Nasdaq gauges advanced as big tech stocks rose.

Long-term government bonds rallied following an auction for 30-year securities that showed strong demand.

Analysts are closely monitoring the spread of the coronavirus in the U.S. and across the world, with record deaths in Florida and California seen as ominous signs. While optimists are betting that fiscal and monetary support will contain the fallout and cited jobs data Thursday that came in better than expected, others pointed out that the labor market is still treacherous.

“Sentiment clearly took a turn negative today, and the buildup of Covid-19 concerns seems to be the biggest issue,” said Larry Milstein, senior managing director of government debt trading at R.W. Pressprich & Co. Given that cases are also rising in Asia, “there’s a real concern that a second wave is approaching that will impact the global economy.”

Elsewhere, European shares joined the decline. Gold traded near $1,800 an ounce. West Texas oil slumped after swelling U.S. crude stockpiles raised fresh concerns about oversupply and a key Libyan field resumed production.

Chinese equities outperformed as the Shanghai Composite notched an eighth day of gains, helped by signals of official support and strong demand from retail traders.

Here are some key events coming up:

• Singapore holds its general election on Friday.

These are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.6% as of 4 p.m. New York time.
• The Stoxx Europe 600 Index fell 0.8%.
• The MSCI Asia Pacific Index climbed 0.7%.
• The MSCI Emerging Market Index added 0.8%.

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%.
• The euro fell 0.4% to $1.1288.
• The British pound was little changed at $1.261.
• The Japanese yen was little changed at 107.22 per dollar.

Bonds

• The yield on 10-year Treasuries decreased six basis points to 0.61%.
• Germany’s 10-year yield fell two basis points to -0.47%.
• Britain’s 10-year yield sank two basis points to 0.16%.

Commodities

• West Texas Intermediate crude decreased 3.5% to $39.47 a barrel.
• Gold fell 0.3% to $1,803.25 an ounce.

©2020 Bloomberg L.P.