Daily Update: Stocks Slump on Cohn’s Resignation; Binance Hack Rumors Send Cryptos Spiraling
It was a down day for markets Wednesday, as a looming trade war weighed on stocks and an alleged hack of a top cryptocurrency exchange sent digital currencies spiraling.
Stocks Extend Futures Slump
U.S. stocks declined sharply on news that Gary Cohn had resigned from his post as White House economic adviser. Cohn’s resignation materialized after the bell on Tuesday, sending futures markets into freefall.
Wall Street’s major indexes opened lower and extended losses throughout the day, with the Dow Jones Industrial Average falling 82.76 points, or 0.3%, to 24,801.36. The blue-chip average was down more than 300 points in intraday trade.
The broader S&P 500 Index pared losses to finish down only 0.1% at 2,726.80, with most major sectors finishing in the red. Energy and consumer stocks were the biggest laggards, with each sector falling at least 0.7%.
Information technology stocks bucked the general downtrend to finish higher, leaving the Nasdaq Composite Index better off than its peers. The benchmark index closed up 0.3% at 7,396.65
Equities have been under pressure all week long on the prospect of a looming trade war between the United States and its allies. On Friday, President Donald Trump said his administration would slap hefty import duties on steel and aluminum products. The European Union has already responded with a tariff hit-list of its own valued at up to $3.5 billion.
Concerns over trade are what prompted Cohn to resign on Tuesday, although White House officials said there were other disagreements at stake as well.
U.S. Private Sector Payrolls Surge in February
The U.S. labor market showed no signs of slowing in February, with private sector employers adding 235,000 workers, according to the latest report from ADP. Analysts in a median estimate had called for a monthly gain of 195,000. The payrolls processor has now reported jobs growth of 200,000 or more in each of the last four months.
Economists at the U.S. Department of Labor will release their official nonfarm payrolls report Friday morning at 8:30 a.m. ET. The report is expected to show a solid 200,000 addition to payrolls last month, with unemployment likely falling to 4% from 4.1%.
Data on average hourly earnings will also be scrutinized by the markets for signs of inflationary pressures. Average earnings rose at an annualized 2.9% in January, the highest in more than eight years and prompting fears of imminent rate hikes by the Federal Reserve.
Cryptocurrencies Dive on Hack Rumors
The cryptocurrency market sold off Wednesday on speculation that Binance may have been targeted in an elaborate hack to pump the value of Viacoin, a lesser known altcoin valued at around $4. Although Binance denied it was hacked, several users took to social media to complain about unauthorized withdrawals targeting their altcoins.
Bitcoin was down by as much as 11% as prices fell below $10,000 for the first time in over a week. Each crypto asset in the top-ten suffered losses.
The total value of all cryptocurrencies fell around 9% to $403 billion after touching a session low of around $388 billion.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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