WASHINGTON: The Nasdaq Composite Index closed at a new record high on Friday, but blue-chip US stocks and oil sank amid renewed concerns about COVID-19, which has dented safe havens such as the US dollar. also promoted.
Bounced by the tech-heavy Nasdaq as investors fret about renewed lockdowns, Austria announced new restrictions to tackle rising cases and fears Germany could follow suit.
Banks and travel companies bore the brunt of the losses, as investors fretted about a slowdown in economic activity if case numbers rise and tech stocks jumped to safe havens.
“This is a normal time to take risks. And in this case, there’s just enough liquidity that the market doesn’t go down – just people take the risk by going to a safe haven,” said Jay Hatfield, chief executive of Infrastructure Capital Management in New York. “Right now, a headline of COVID-19 Days.” Is. Right now every trade in the market is being driven by COVID.”
The Dow Jones Industrial Average ended the week down 0.75%, closing its fourth week down in five. The S&P 500 lost 0.14%, while the Nasdaq Composite gained 0.4% and closed above 16,000 for the first time.
The MSCI World Equity Index, which tracks stocks in 45 countries, fell 0.28%.
Renewed COVID concerns also helped send oil prices down more than 3%, as the sector was already grappling with low demand and concerns over a possible release of crude reserves to prop up gas prices.
Brent crude was down 3.47% to $78.42 a barrel, while US crude was down 3.67% to $76.11 a barrel. For the first time since March 2020, both the benchmarks were down for four consecutive weeks.
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The return of COVID-19 fears prompted a series of safe havens.
Long-standing US Treasury yields fell on Friday on increased demand. The final yield of the benchmark 10-year notes stood at 1.545%, after falling as low as 1.515%, the lowest since November 10.
The dollar rose after Federal Reserve Governor Christopher Waller called for accelerating economic aid to tighten central bank monetary policy. Federal Reserve Vice Chairman Richard Clarida said separately that when the Fed next meets to set policy in mid-December, it may be appropriate to consider a sharp wind-down.
The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.51% to 96.029. The dollar is up about 1% in the week, while the euro has hit a 16-month low.
The dollar’s gain came on the price of gold. Spot gold fell 0.62% to $1,846.91 an ounce.
“Gold prices are on the decline as the Fed calls about an uptrend in the dollar,” said Edward Moya, senior market analyst at brokerage OANDA.
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