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Dow falls more than 300 points as virus resurgence threatens economic recovery

Shares fell on Thursday as an increase in US coronavirus cases raised concerns about economic health towards the end of the year.

The Dow Jones Industrial Average fell 317.46 points (1.1%) to 29,080.17. The average of 30 shares fell by 495 points early in the session. The S & P 500 fell 1.0% (35.65 points) to 3,537.01 and the Nasdaq Composite fell 0.7% (76.84 points) to 11,709.59.

The fall on Thursday pushed the S & P 500 just 0.8% above Friday’s closing price of 3,509.44, regaining most of the profits from the vaccine rally earlier this week.

The key average fell sharply after Federal Reserve Chairman Jerome Powell said the US economic outlook remained uncertain after this week’s positive news about vaccines.

“From our point of view, it’s too early to confidently assess the impact of news on the course of the economy, especially in the short term,” Powell said of the vaccine. “The virus is widespread and can be difficult in the coming months.”

The move on Thursday came as the number of cases of coronavirus continued to grow. On Wednesday alone, more than 144,000 cases of infection were recorded in the United States, with a national total of more than 10 million. Chicago issued a curfew on Thursday, and New York imposed a new curfew on restaurants, bars and gyms.

“Because some of the catalysts in early November are out of the way, the market is some of the short-term COVID trends in which the United States has reported record cases and over 100,000 new cases for eight consecutive days. It seems that you have expressed concern about it, “said Yousef Abbasi, Global Market Strategist at StoneX, in a memo.

Thursday travel and bank stocks were one of the biggest delays. United Airlines fell more than 4%, while Carnival fell 7.9%. JP Morgan Chase, Citigroup and Wells Fargo all decreased by more than 1%.

Earlier this week, the recovery-dependent stocks rebounded after the company’s Covid-19 vaccine candidates from Pfizer and BioNTech were announced to be more than 90% effective in Phase 3 trials.

More positive news on vaccines will soon come as Moderna announced Wednesday night that a sufficient case of coronavirus had occurred in a phase 3 trial and that preliminary results were submitted to an independent safety oversight committee. May come to.

The stock rebound after Pfizer’s news followed a strong election week for stocks. Rick Leader, head of BlackRock’s global allocation team, said in a “Closing Bell” Wednesday that he expected trading to be volatile, but that stock prices would continue to rise until the end of the year.

He also said he expects the economic recovery to continue despite the increase in Covid-19 cases.

“The Fed will stay in this relaxation mode for a period of time,” Leader said. “If you put in that much stimulus, you put in that much liquidity, then you add fiscal stimulus … the economy will actually be pretty good.”

However, CNBC’s Jim Cramer considers some of Wall Street to be too optimistic about the market given the recent rise in Covid-19 infections.

“I think there are too many positive people,” Kramer said in “Squawk Box.” “Don’t we just think about what happens when all these businesses are closed?” He said, citing the possibility of blockades being implemented to curb the outbreak. It was.

In terms of data, the first weekly unemployment claims fell from 757,000 last week to 709,000, the Ministry of Labor said Thursday. The market has fallen for the fourth straight week on the first bill.

Dow falls more than 300 points as virus resurgence threatens economic recovery

Source link Dow falls more than 300 points as virus resurgence threatens economic recovery

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