Wall Street falls as U.S. virus cases pass 85,000

NEW YORK - Wall Street fell on Friday, ending a massive three-day surge as doubts about the fate of the U.S. economy resurfaced and the number of coronavirus cases in the country climbed.

 

U.S. stock indexes trimmed deeper losses after the House of Representatives approved a $2.2 trillion aid package - the largest in American history - to help people and companies cope with an economic downturn caused by the coronavirus outbreak and provide hospitals with urgently needed medical supplies.

The United States has surpassed China and Italy as the country with the most coronavirus cases. The number of U.S. cases passed 85,000, and the death toll exceeded 1,200.

“We have still not fully understood the degree of the economic impact,” warned Massud Ghaussy, senior analyst at Nasdaq IR Intelligence in New York.

“Currently, from a policymaker’s perspective, it’s a relative balance between managing the spread of the virus and opening the economy.”

President Donald Trump is expected to promptly sign the stimulus package into law.

The bill, along with unprecedented policy easing by the Federal Reserve, have put the S&P 500 on course for its best week in more than a decade. However, it is still down about 24% from its February high.

In its strongest three-day performance since 1931, the Dow surged 21% from Monday through Thursday, establishing it in a bull market, according to one widely used definition. However, many investors believe there is a strong risk the market could fall deeply again as coronavirus infections increase and more people die.

“Next week will depend on what happens over the weekend,” said Lindsey Bell, Chief Investment Strategist at Ally Invest. “If there is a major acceleration over the weekend of coronavirus cases in New York and other states and the hospital system continues to get jammed up, then I think it will be a rough week for the market.”

Macroeconomic indicators offered a glimpse of the economic devastation from the crisis as the lockdown of major cities upends the lives of millions of Americans.

U.S. consumer sentiment dropped to a near 3-1/2-year low in March, according to a survey released on Friday, a day after data showed a record 3 million surge in jobless claims last week.

At 2:24 pm ET, the Dow Jones Industrial Average was down 2.6% at 21,966.31 points, while the S&P 500 lost 2.20% to 2,572.23.

The Nasdaq Composite dropped 2.24% to 7,622.94.

Delta Airlines American Airlines and United Airlines fell between 3% and 7% as U.S. Treasury Secretary Steve Mnuchin said the aid designated for airlines in the package was not a bailout and that taxpayers would need to be compensated.

Boeing shed 8%, but was still up more than 70% for the week, after Mnuchin said the planemaker had no intention of using federal money.

The banking index .SPXBK fell about 4%, tracking U.S. Treasury yields as investors sought safety in high-quality assets.

The energy index .SPNY was the biggest percentage loser among the 11 major S&P sectors, sliding 5.5%, following a drop in oil prices.

Declining issues outnumbered advancing ones on the NYSE by a 3.38-to-1 ratio; on Nasdaq, a 2.72-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 1 new lows; the Nasdaq Composite recorded 8 new highs and 28 new lows.




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