Stocks Slide for a Second Day as Rally Loses Steam

21 Apr 2021 · 3rd Party Analysis

Stocks Slide for a Second Day as Rally Loses Steam


Stocks Slide for a Second Day as Rally Loses Steam

In Summary

  • Global stocks drop on signs of rising Covid-19 infections
  • US equity futures on Wednesday suggest a lower open

US stocks closed Tuesday’s session in the red, following a significant drop in the European markets. Major US benchmarks ended the session yesterday with the first back-to-back losses since March. Global stock, in general, dropped sharply on Tuesday as blue-chip companies tied to gain from an economic reopening took the hardest hit.

Wall Street extended losses for a second straight day amid rising Covid-19 infection levels in some countries, including the US. The Dow Jones Industrial Average slid 0.75%, or 256.33 points, to end the session at 33,821.30. The S&P500 dropped 0.68%, or 28.32 points, to finish at 4,134.94, and the Nasdaq Composite declined 0.92%, or 128.50 points, to close at 13,786.27.

Real-economy stocks led the decline yesterday with airline shares losing the most. United Airlines fell $4.69, or 8.5%, to $50.30. The company reported disappointing first-quarter results. Other airlines, including American Airlines, Delta Air Lines, and Southwest Airlines, were also among Tuesday’s losers, falling more than 3% apiece.

US stock futures on Wednesday point to a lower open with Nasdaq futures dropping the most, around 0.40%. Dow futures and S&P futures are also negative by roughly 0.20% each.

In after-hours trading, Netflix’s shares tumbled roughly 9% after the company reported weaker-than-expected growth for the first trimester. The streaming giant, worth nearly $250bn, added 4 million new paying customers globally, falling short of the forecasted 6 million.

In Europe, equities had one of their worst days of the year. The pan-continental Stoxx Europe 600 lost 1.9%. The UK’s FTSE100 retreated 2%, while the German DAX declined 1.55%. The French CAC40 went lower by 2.09% and the Spanish IBEX35 dropped 2.89%.

On the cryptocurrency front, bitcoin remained fairly flat yesterday, hovering around $55,000 after it dropped more than 12% over the weekend. Dogecoin, the meme cryptocurrency, pared gains after the wild upswing failed to produce a new high during the day some have called “Doge day”. Dogecoin slid about 20% yesterday and is now trading around $0.33.

Johnson & Johnson Earnings Boosted by Vaccine Sales

Meanwhile, Johnson & Johnson reported first-quarter results as the earnings season ramps up. The largest pharmaceutical company in the world saw revenue growth of 10% year on year. Its Covid-19 vaccine added $100 million to the company’s sales growth from January to March. The outlook, however, remains uncertain as the vaccine is now paused while health experts probe safety concerns.

On that note, the European drug regulator said a warning should be added to the J&J vaccine’s product information about a possible rare, serious blood-clot condition. The European Medicines Agency did not halt the use of the vaccine and stated that the benefits outweigh the risks.

The chief medical advisor to President Biden, Anthony Fauci, said that the J&J vaccine could be back in use by Friday. In the US, the number of confirmed blood-clot cases linked to J&J’s vaccine has increased to nine, up from the six reported. By Apr 12, one day before the vaccine was officially halted, 6.8 million shots have been administered.

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