Stock market live updates: Sudden Dow drop, gold 7-year high, E-Trade surges

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Economist Mohamed El-Erian, while refusing to speculate on the direct cause of Thursday’s sudden market drop, did say that he thinks investors are not taking the impact of the coronavirus on companies seriously enough in general. “This coronavirus issue is big. It will affect a lot companies, not just those with direct exposure to China,” the Allianz chief economic advisor and ex-Pimco CEO told “Squawk Alley.” “The markets have tended to underestimate what a big demand and supply shock this is.” — Belvedere

What a difference a day makes. Shares of speculative stocks Tesla, Plug Power and Virgin Galactic all slid more than 3% in midday trading Thursday. The leg lower follows a frenzy of trading activity on Wednesday that saw shares of Virgin Galactic and Plug Power spike 23.27% and 17.94%, respectively, as retail investors got in on the trade, and social media users took to popular sites like Reddit to discuss the surging stocks. Earlier in the session, Virgin Galactic gained more than 13%, breaking $40 and hitting a new high, before reversing gains and dropping into negative territory. — Stevens

Multiple traders pointed CNBC to a story on the website of the Global Times, which is a tabloid under the People’s Daily, the official newspaper of the Communist Party of China. The story noted a sharp rise in coronavirus infections at a single Beijing hospital. The timing does not match up with the recent sell-off, however, as this story was posted a few hours ago. Still, the story taps into the fears investors have right now about the coronavirus possibly spreading in the capital city. Traders these days are more apt to sell first and figure out the facts later. -Melloy

The Dow’s losses are now greater than 300 points and it’s still not clear what is driving the move, other than possible technical analysis factors triggering quantitative selling. The Dow went from down 200 points to negative 370 points in the span of just a couple of minutes. Traders contacted by CNBC so far have no good reason behind the move. Big liquid name like Microsoft are falling with ‘MSFT’ now down more than 2% -Melloy

Source: https://www.cnbc.com/2020/02/20/stock-market-today-live.html

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