Dow Falls as Bears Sink Claws in Value on Record Surge in U.S. Cases

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Investing.com – The Dow fell Thursday, as value stocks fell further into the red on fears further restrictions to curb the record surge in coronavirus cases will undermine the economic recovery.

The Dow Jones Industrial Average fell 1.3%, or 383 points. The S&P 500 was down 1.25%, while the Nasdaq Composite dropped 0.73%.

As the U.S. witnessed a record-high 145,835 cases Wednesday, parts of the country are re-imposing economy-sapping restrictions to curb the virus. The threat of renewed lockdown measures has triggered investor jitters about the impact to the pace of the recovery.

“Although the lockdowns that were widespread over the Spring don’t seem likely to repeat, we expect that many local governments will quickly enact policies that attempt to limit the spread at the expense of promoting economic activity which could lead to a new round of layoffs,” Jefferies (NYSE:JEF) said in a note following the jobless claims report released Thursday.

In the week ended Nov. 7, 709,000 people filed for unemployment insurance, down 48,000 from the prior week’s upwardly revised 757,000, and better than the expected 730,000 claims expected.

Major cities in the U.S. including Boston, New York and Chicago have recently announced restrictions and curfews on hospitality to stem the jump in cases.  

Energy led the rout in value stocks as an unexpected build in U.S. crude weekly stockpiles exacerbated the selling .

Crude oil inventories rose 4.3 million barrels, according to the Energy Information Administration. The expectation was for a draw of 913,000 barrels.

As well as energy, materials and financials also came under pressure, with the latter taking a blow from retreating bank stocks following a surge earlier this week on positive vaccine news.

JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup (NYSE:C) were down more than 2%.

Tech, which a day earlier had offset losses in value stocks, was on the backfoot. Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) Alphabet (NASDAQ:GOOGL) and Microsoft  (NASDAQ:MSFT) traded lower.

In other news, Moderna (NASDAQ:MRNA) stoked hopes that preliminary data for its Covid-19 vaccine candidate could be released soon after it topped the number of coronavirus cases needed in its late-stage vaccine study to submit the preliminary data to an independent review board. Its shares rose 3%.

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