Wall Street Stocks Slide as Delta Surge Damps Recovery Hopes
05 Aug 2021 · 3rd Party Analysis
- US equities traded mostly lower on Wednesday; futures indicate a higher open today
- S&P500 retreats from a record, earnings reports deliver strong results but weak guidance
Stocks on Wall Street declined broadly on Wednesday as investors brought back into the market mix elevated concerns that the economic recovery might be stalling due to a surge in Delta virus cases across the states. Moreover, fresh economic data showed private-sector jobs added fewer employees than economists had predicted for July.
The Dow Jones Industrial Average slid 323.73 points, or 0.92%, to finish the session at 34,792.67. The S&P500 retreated 20.49 points, or 0.46%, to a close of 4,402.66. The broad-based index surged to a record close a day earlier. The Nasdaq Composite eked out a small gain of 19.24 points, or 0.13%, to end the day at 14,780.53. The tech-heavy index traded sideways for most of the day as investors didn’t find enough buying power to sustain a larger move higher.
The US continues to raise its seven-day average of confirmed coronavirus cases as the Delta strain is sweeping across the country. For Wednesday, the CDC reported the states averaged 96,036 new cases daily for the past seven days, up from a daily number of 92,135 measured the day before.
An economic report from ADP showed 330,000 new jobs were added by the private sector in July, about half of what analysts were expecting. The market interpreted the statistics as foreshadowing the upcoming nonfarm payrolls report on Friday. Economists expect the labor market to have grown by 870,000 new jobs in July, up from the previous number of 850,000 for June.
Despite concerning data related to Delta progress and an economic slowdown, stocks have maintained their upside momentum this week, propelled higher by strong corporate earnings reports.
Several major companies reported robust earnings figures for the second quarter. General Motors posted pretax earnings before one-time items of $4.1bn, or $1.97 a share, beating estimates of $1.82 a share. The auto maker’s stock, however, declined about 9% Wednesday, the worst single-day performance for the year. General Motors warned the increasing computer-chip shortage and rising commodity costs would drag down second-half results.
Ride-hailing company Lyft slumped $5.85, or 11%, to finish the day at $49.53 despite the firm saying it reached its earnings target earlier than expected. Lyft saw a quarterly profit for the first time, a quarter earlier than projected.
Steadiness Characterizes Ether’s Price
Meanwhile, futures contracts on Thursday hover in positive territory. Dow futures indicate a higher open by roughly 30 points as traders and investors attempt to erase yesterday’s losses. S&P500 futures are also in the green, higher by about 0.10%. Nasdaq futures are up less than 0.10% in pre-market trading ahead of Thursday’s opening bell in New York.
European markets today opened relatively flat following another strong rally on Wednesday. The region-wide Stoxx 600 yesterday surged to a new record high as the index closed at 468.22, up 2.84 points, or 0.61%. All major European bourses closed Wednesday action in the green.
Ether today is outshining bitcoin as crypto circles around the world expect a major upgrade to the Ethereum network. The historical improvement, called London, will aim to reduce transaction fees on the Ethereum blockchain. It will also introduce a coin burn, which would mean that part of every transaction will be burned or removed from circulation.
Bitcoin on Thursday gyrates around $39,500, after a 4.7% gain in the previous day. Ether is steady near $2,700 after the coin surged over 10% on Wednesday.