Today both France and Germany returned to national lockdowns to fight the latest surge in coronavirus cases.
That, I think, more than increase in virus cases is what drove today’s selling. Investors are afraid that we’re returning to the months when countries shut down big parts of their economies in an effort to control the spread of the coronavirus.
Today, the Standard & Poor’s 500 closed down 3.53% and the Dow Jones Industrial Average was lower by 3.42%. The NASDAQ 100, home of the big tech names, dropped 3.93% at the close.
In Germany, bars, restaurants and theaters will close for four weeks, but schools will stay open. In France President Emmanuel Macron is expected to release more information about a national shutdown Thursday. Today he said “I have decided that we must return to confinement.” Restaurants and bars will be closed until at least December 1.
The big worry, of course, is that significant parts of the United States will be forced to follow not too far down the road. Stories like that of Newark, the largest city in New Jersey, introducing a second shutdown just fan those fears. The city has seen a rise in positive COVID-19 tests to 11% in the last three days. And in response Newark has required restaurants to close indoor dining by 8 p.m. and outdoor dining by 11 p.m. Those restrictions will stay in place until at least November 10. Newark’s restaurants are already coping with rules that limit indoor dining to 25% of capacity.
Investors and traders sold just about everything today, October 28. Apple (AAPL) was down 4.63% at the end of the session. Microsoft (MSFT), which reported strong earnings only yesterday, fell 4.96%. Nvidia (NVDA) closed lower by 5.75% and Alphabet (GOOG) finished lower by 5.46%.
The Technology Select Sector SPDR ETF (XLK) closed down 4.24. The Financial Select Sector SPDR ETF (XLF) did somewhat better with only a 2.56% loss.