Stocks stumble as US coronavirus cases top 200,000
NEW YORK - For stock investors the second quarter kicked off on a down note as U.S. cases of the coronavirus topped 200,000.
The Dow Jones Industrial Average plunged over 973 points or 4 percent, while the S&P 500 and Nasdaq Composite fell 4.4 percent.
Boston Federal Reserve President Eric Rosengren believes the coronavirus is a ‘Black Swan’ event that will result in two-quarters of negative GDP growth coupled with a 10 percent unemployment rate for several months, a far cry from the current rate of 3.5 percent.
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The selling follows the worst first quarter in years after President Trump warned the number of COVID-19 infections is set to surge in the coming weeks warning Americans that the country is in for a “very painful two weeks” and that the number of deaths in America due to the virus could surge as high as 240,000.
The blue-chip Dow plummeted 23 percent during the first three months of the year, its worst quarter since 1987. The S&P 500 fell 20 percent and the Nasdaq Composite shed 14 percent, their worst quarterly performances since the fourth quarters of 2008 and 2018, respectively.
Looking at stocks, oil companies got some attention on word the executives of the major energy companies will meet with President Trump on Friday to discuss the collapse in crude prices which fell 0.83 percent to $20.31 on Wednesday.
The closing numbers are displayed after the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 18, 2020 in New York. - Wall Street stocks plunged again March 18, 2020. (Photo by BRYAN R. SMITH/AFP via Getty Images)
Airlines were also in focus after data showed passenger traffic was down 86 percent in two weeks. Cruise operators were also lower amid renewed fears over the health of the industry.
Xerox ended its $35 billion attempted hostile takeover of HP, saying the COVID-19 pandemic has created conditions that hinder continuing its pursuit of the company.
Macy’s was removed from the S&P 500 as its market capitalization fell to $1.5 billion, the smallest in the index. The stock will be placed in the S&P SmallCap 600 starting on April 6.
Banks stocks were pressured as U.S. Treasurys rallied sharply and the yield curve flattened. The yield on the 10-year note was down to 0.630 percent.
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Gold prices slipped to $1,578 an ounce.
In Europe, markets were lower across the board, with France’s CAC down 4.17 percent, pacing the decline. Germany’s DAX and Britain’s FTSE were off 4 percent and 3.75 percent, respectively.
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Asian markets fell as Hong Kong’s Hang Seng lost 2.19 percent and China’s Shanghai Composite slid 0.57 percent. Japan’s Nikkei remained closed for a holiday.
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