Stocks closed sharply lower on Wall Street as the number of confirmed new coronavirus cases in the U.S. hit an all-time high, stoking worries that the reopening of businesses investors have been banking on to revive the economy will be derailed. The S&P 500 fell 2.4% Friday. Texas and Florida reversed course and clamped down on bars again in the nation’s biggest retreat yet. The two states joined the small but growing list of those that are either backtracking or putting any further reopenings of their economies on hold because of a resurgence of the virus, mostly in the South and West.
fell sharply on Wall Street Friday as the number of confirmed new coronavirus
cases in the U.S. hit an all-time high, stoking worries among investors that
the reopening of businesses they are banking on to revive the economy will be
500 slid 2%, giving up all of its gains after a rally the day before. The
selling caps a choppy week of trading on Wall Street as investors turn cautious
in the face of a resurgent outbreak. The surge in the number of confirmed new
coronavirus cases has undercut the optimism for an economic turnaround that
helped drive a rebound for stocks for most of the past three months.
certainly calls into question how vigorous this recovery will be,” said Bill
Northey, senior investment director at U.S. Bank Wealth Management. “We have to
acknowledge there’s a high degree of uncertainty about how this is going to
progress for the balance of the year.”
Jones Industrial Average was down 645 points, or 2.5%, to 25,096. The Nasdaq,
which hit an all-time high earlier this week, slid 2%. Despite the pullback
this week, the S&P 500 is still on pace for its best quarter since the
fourth quarter of 1998.
have been mostly rallying since April on hopes that U.S. states and regions
around the world could continue to lift the spring lockdowns put in place to
slow the spread of the coronavirus. The increase in cases casts doubt on
expectations that the economy will continue to reopen and things can get back
to normal sooner, rather than later.
number of confirmed new coronavirus cases per day in the U.S. has hit an
all-time high of 40,000, eclipsing the mark set during the deadliest stretch in
late April. Deaths and hospitalizations have been rising in parts of the
country, especially in the South and West. The resurgence in the virus has
already led some governors to backtrack or at least pause the reopenings of
has real implications for the pace where we can return to economic normalcy,”
Northey said, adding that while some states are rolling back their reopening,
it’s unlikely there will be a broad, nation-wide lockdown.
stock market is likely to remain volatile as traders weigh the ups and downs in
the trajectory of the pandemic.
large part, we’re going to see some of these fits and starts,” said Charlie
Ripley, senior investment strategist for Allianz Investment Management. “It’s
going to weigh on sentiment to some extent, but overall we think the economy is
on the mend and the recovery is on its the way.”
companies led the selling after the Federal Reserve ordered many of the
nation’s biggest banks to suspend buybacks of their stock and cap dividend
payments for several months.
One Financial fell 7.8%, Goldman Sachs dropped 8.4% and JPMorgan was down 5.2%.
The announcement came as part of the Fed’s annual “stress tests,” which showed
that in a worst-case scenario involving the U.S. economy being ravaged by the
pandemic, the banks would collectively lose roughly $700 billion.
slumped 6.9% as an advertising boycott aimed at pressuring the social
networking giant into doing more to prevent racist and violent information from
being shared on its service intensifies. On Thursday, Verizon announced it had
joined the Facebook ad boycott, saying it has paused advertising on Facebook
until the company “can create an acceptable solution that makes us
comfortable.” Shares in Verizon were down 2.3%.
also dumped shares in Nike after the athletic apparel maker reported a big loss
as most of its stores were forced to close. The stock slid 7.1%.
yields were mixed. The yield on the 10-year Treasury note slipped to 0.64% from
0.67%, another sign of caution in the market. The yield tends to move with
investors’ expectations for the economy and inflation.
that a pullback in the reopening of businesses could hamper demand for energy
helped pull down oil prices Friday. Benchmark U.S. crude was down 0.8% to
$38.43 a barrel. Brent crude, the price standard for international oils, was
down 0.9% to $40.76 a barrel.
indexes in Europe were mostly lower. The DAX in Germany slid 0.7%, while the
CAC 40 in France was down 0.2%. The FTSE 100 in London was up 0.2%. Markets in
Asia finished mostly higher.