Portfolio

US open: Stocks sharply lower following Evergrande meltdown

By Iain Gilbert

Date: Monday 20 Sep 2021

US open: Stocks sharply lower following Evergrande meltdown

(Sharecast News) - Wall Street stocks were firmly in the red early on Monday as an already rough month for major indices looked set to get even rougher still.
As of 1530 BST, the Dow Jones Industrial Average was down 1.47% at 34,077.00, while the S&P 500 was 1.56% weaker at 4,363.79 and the Nasdaq Composite came out the gate 2.02% softer at 14,740.26.

The Dow opened 507.88 points lower on Monday, extending losses recorded on Friday that saw all three major indices end last week in the red.

Markets participants were in a selling mood at the open amid concerns regarding the potential domino effect of Chinese property giant Evergrande's massive plunge on the nation's property market and fears that the Federal Reserve will signal that it was prepared to start pulling away monetary stimulus at its two-day policy meeting starting on Tuesday as a result of surging inflation and an improving job market.

Heightened Covid-19 cases due to the Delta variant were also firmly in focus, with cases remaining at January levels ahead of the onset of colder weather in North America, while traders were also concerned about brinkmanship in Washington, with Congress returning to DC as the deadline to raise the US' debt ceiling approaches.

The yield on the benchmark 10-year Treasury note also slipped around four basis points to 1.324%, with investors heading for safety as the Cboe volatility index, Wall Street's fear gauge, moved to 25.51 level - its highest reading since May.

Bitcoin slipped around 10% to drop below $43,000, while gold added about 0.5% to sit at $1,760.

On the macro front, the NAHB/Wells Fargo housing market index revealed homebuilder sentiment improved for the first time in three months in September as lumber prices eased and buyer demand grew. According to the NAHB, sentiment ticked up one point to 76. However, that figure was still well and truly shy of the 83 reported at the same time in September 2020.

No major corporate earnings were slated for release on Monday.

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