(Bloomberg) — U.S. stocks slumped, with airlines and hotels particularly hard hit amid signs that the world economy has a long way to go to get back on track.
Almost four shares fell on the S&P 500 Index for every one that gained. The tech-heavy Nasdaq gauges dropped from a record intraday high in the afternoon, but still outperformed as heavyweights such as Apple Inc. and Facebook Inc. edged higher. European shares slipped on concern the economy will take longer to recover.
Gold climbed to the highest since 2011. The dollar strengthened and Treasury yields dipped. Brazil’s currency and stocks slumped as President Jair Bolsonaro said he had tested positive for Covid-19.
Stock investors took a breather after a ferocious rally that fueled the S&P 500’s best winning streak this year. While data show the global economy could be past the worst of the slump, it’s a long road back to pre-crisis levels. Federal Reserve Bank of Atlanta President Raphael Bostic said the renewed spread of coronavirus may threaten the pace of the U.S. recovery as businesses and consumers put plans on hold.
After “a five-day rally where the market’s up quite a bit, it’s not so surprising to have a little bit of a pause,” said Jeff Mills, the chief investment officer at Bryn Mawr Trust Co. “It’s just sort of the natural movements of the market. You can’t go up in a straight line every single day.”
The European Commission gave its starkest warning yet about the impact of the pandemic. Officials now forecast a contraction of 8.7% in the euro area this year, a full percentage point deeper than previously predicted. Novavax Inc. surged after it was awarded $1.6 billion in U.S. funding to support large-scale manufacturing of its vaccine candidate.
German Industry Rebounds From Virus Nadir Facing Long Road Ahead
Elsewhere, most Asian shares dropped, even as Chinese stocks powered ahead for a sixth day, although at a slower pace. The offshore yuan briefly strengthened through the 7 per dollar level for the first time since March.
Here are some key events coming up:
The EIA crude oil inventory report comes Wednesday.All eyes will be on the U.S. weekly jobless claims report on Thursday.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 3:20 p.m. New York time.The Stoxx Europe 600 Index sank 0.6%.The MSCI Asia Pacific Index declined 0.6%.The MSCI Emerging Market Index decreased 0.8%.
Currencies
The Bloomberg Dollar Spot Index gained 0.3%.The euro decreased 0.2% to $1.1284.The British pound rose 0.5% to $1.2552.The Japanese yen weakened 0.2% to 107.55 per dollar.
Bonds
The yield on 10-year Treasuries dipped three basis points to 0.64%.Germany’s 10-year yield was little changed at -0.43%.Britain’s 10-year yield sank two basis points to 0.18%.
Commodities
West Texas Intermediate oil fell 0.6% to $40.39 a barrel.Gold rose 0.6% to $1,795.50 an ounce.
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