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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

Minor Gains on Wall Street as Truncated Holiday Week Opens

With a shortened week due to the holiday bringing little in the way of economic indicators, investors are hoping to use the relative calm to recoup old losses.

MANHATTAN (CN) — With a shortened week due to the holiday bringing little in the way of economic indicators, investors are hoping to use the relative calm to recoup old losses.

At the morning bell on Monday, the Dow Jones Industrial Average gained 200 points, while the S&P 500 and Nasdaq had lesser gains. While the Nasdaq is slowly climbing back to its coveted 10,000-point high mark, the Dow and S&P 500 both are far below its previous high point in mid-February.

Coming off the heels of last week’s rout on Wall Street, markets in Asia closed down across the board on Monday, with Japan’s Nikkei and the South Korean Kospi falling about 2% each.

Markets in Europe, while jittery in early trading, seemed ready to have a better outing, with most markets up slightly and the pan-European slightly above 0% by 8:30 a.m. EST.

Wall Street has remained fixated on the recent uptick in coronavirus cases and hospitalizations the last few days, with several states in the Sun Belt clocking in record numbers on both fronts daily. 

To date, more than 10.1 million people have been infected by Covid-19 worldwide, while nearly 502,000 have died, according to data compiled by Johns Hopkins University. In the United States, 2.4 million people have contracted Covid-19, while nearly 126,000 have died.

“There is no question that some investors are calling into question the pace of any recovery in economic output, with gold prices hitting their highest levels since October 2012,” wrote Michael Hewson, a senior analyst at CMC Markets. He added that concerns about a prolonged recovery “are likely to be more of a drag on U.S. stocks in the short term, though they are also set to act as a drag elsewhere as well.”

Gold prices have been inching up toward $1,800 per ounce over the last week, as investors seek safer havens to park their money.

While expectations of a quick recovery were higher earlier this month, many economists now are predicting a slog through the rest of the year. The Federal Reserve Bank of Atlanta’s latest estimate of gross domestic product has improved but still pegs real GDP to contract by nearly 40% for the second quarter of 2020. 

“The pandemic fears are having less and less impact on capital markets as investors accept the fact that the battle against the virus is likely to be an ongoing battle for at least a year,” Boris Schlossberg of BK Asset Management wrote in an investor’s note Monday morning.

He also wrote, however, that “investors may be far too optimistic than the current facts merit.”

While the generally quick overall rebound in stocks has been driven by consumer-spending expectations, a continuation of tepid demand could have “ripple effects on income” and cause permanent shutdowns in certain retail sectors, Schlossberg warned.

Follow @NickRummell
Categories / Economy, Financial, Securities

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