Dow makes 275-point U-turn and trades lower as the stock market struggles to stop the loss of momentum

What drives the market?

After an initial push up, the stock market struggled to maintain its elevation by mid-morning on Friday, with the sale of shares of UnitedHealth Group Inc. UNH,
-2.03%
and Salesforce.com Inc. CRM,
-1.30%,
weighing on Dow industrials and a drop in consumer staples also putting pressure on the broad index.

The early volatility ends a shortened holiday week that has seen the Dow and S&P 500 suffer losses for four consecutive days, marking the longest losing skid since June 18.

The crisis of the week comes amid concerns about the impact of the delta variant of the coronavirus on global economic growth in recent months.

Biden on Thursday announced new vaccine mandates, including the requirement that branch employees as well as federal contractors vaccinate, without testing alternatives. He also discusses a Labor Department rule requiring companies with 100 or more workers to ensure their employees are vaccinated or show a negative test result weekly or more frequently.

The United States averages just under 150,000 new cases per day, with 53% of the population fully vaccinated, which is well behind many countries in Europe and Canada, according to a New York Times tracker.

While the focus is on increasing COVID cases, markets are also looking at the Federal Reserve as an indication of when it may cut back on its bond purchases. Investors will have to wait until September 21 and 22 for the next Federal Open Market Committee meeting. However, there is already speculation that the Fed will set the stage at its next meeting for announcing a plan to reduce its monthly asset purchases at its November meeting, according to the Wall Street Journal.

Read: Fed’s Kaplan and Rosengren to sell shares to avoid perceived conflict of interest

Meanwhile, a wholesale inflation report arrived hotter than expected. The US producer price index rose 0.7% in August, the Labor Department said on Friday, down from a 1% jump in July but up from the average forecast of economists polled. by the WSJ for an increase of 0.6%.

A number of Fed officials have described inflation as short-lived and economists are starting to talk about price spikes in the wholesale industry. However, producers are still grappling with shortages, bottlenecks and transportation issues.

“We expect the big central banks to stay pro-growth, keeping rates low for longer. This is positive for equity markets, especially cyclical and value market sectors, ”Mark Haefele, chief investment officer at UBS Global Wealth Management, told clients on Friday in a note.

The European Central Bank said on Thursday it would make asset purchases under its Emergency Pandemic Purchase Program, or PEPP, at a “moderately slower pace” after ramping up purchases in recent quarters.

Sentiment also appears to be improving thanks to geopolitics, with large gains across Asia after a phone call between Biden and his Chinese counterpart Xi Jinping. “The call lasted 90 minutes with both sides giving their own turn to the call, although the civilized tone seemed to serve as a general boost to the sense of risk overnight,” said Steen Jakobsen, director of Saxo Bank’s investments, in a note to clients.

Which companies are targeted?

• Actions of Echo Global Logistics Inc. ECHO soared on Friday, after the transportation and supply chain company announced an agreement to acquire private equity firm The Jordan Company LP in a deal valued at $ 1.3 billion. of dollars.

• Kroger Cie. KR reported second quarter net income of $ 467 million, or 61 cents per share, down from $ 819 million, or $ 1.03 per share last year.

• Wells Fargo Corp. WFC, + 1.23% of shares rose on Friday despite a civil fine of $ 250 million from the Office of the Comptroller of the Currency for failing to comply with the demands of its 2018 action against the bank.

• Actions of Bumble Inc. BMBL traded lower on Friday, after the dating app said the size of the previously announced stock offering had increased by 20% and announced the offering price at $ 54.00 per share.

• Vista Outdoor Inc. VSTO on Friday announced an agreement to buy Foresight Sports, a San Diego-based golf performance analysis and game improvement company, for $ 474 million.

• Children’s clothing brand OshKosh B’Gosh has teamed up with lifestyle brand Kith for a 28-piece capsule collection that will be available at all Kith stores on Friday, on the Kidset site and on Kith’s European e-commerce site. . OshKosh B’Gosh, a 126-year-old brand, is part of Carter’s Inc’s CRI portfolio.

How are other assets traded?

• The 10-year Treasury bill TMUBMUSD10Y,
  1.328%
  rose 2.4 basis points to around 1.32%. The yields and prices of debt move in opposite directions.

• The dollar was trading at less than 0.1% lower, as measured by the ICE US Dollar Index DXY,
  -0.06%,
  which amounted to about 92.45.

• Gold futures were down, with the December contract GC00,
  -0.13%
  from 0.2% to $ 1,796.50 per ounce.

• CL00 oil futures contracts,
  + 2.33%
  rose as West Texas Intermediate crude rose 2.4% to $ 69.73 per barrel.

• The Hang Seng HSI,
  + 1.91%
  closed up 1.9%. Elsewhere in Asia, the Shanghai Composite SHCOMP,
  + 0.27%
  finished up 0.3% and Japan’s Nikkei 225 NIK was up 1.2%.

• European equities remained stable with the Stoxx Europe 600 SXXP,
  -0.01%
  up by less than 0.1% and the FTSE 100 UKX,
  + 0.18%
  gains 0.2%.