U.S. Stocks, Dow Plunges 1,000+ Points
The Nasdaq had soared to all-time highs on each of the past three stock trading sessions. It climbed above 10,000 points for the first time ever.
Also, U.S. crude oil prices dropped over 7% to $36.66 per barrel. The rising number of COVID-19 cases in the country has unnerved Wall Street. The second wave of infections could force most businesses to close again just after they have reopened.
The U.S. Federal Reserve Chairman Jerome Powell said on Wednesday that the economic future was highly uncertain.
Powell acknowledged that the May jobs report showed 2.5 million jobs added to the economy. However, he noted that millions of Americans will never go back to their jobs and could remain unemployed for years.
U.S. Stocks Losses and the Coronavirus
U.S. stocks extended losses with the S&P 500 on track for its worst percentage decline since April 1. Investors are worried about a second wave of coronavirus infections and a grim economic forecast from the central bank.
At 11:01 a.m. ET, the Dow Jones Industrial Average fell 1,052.92 points, or 3.90%, at 25,937.07. Also, the S&P 500 fell 105.03 points, or 3.29%, at 3,085.11. And, the Nasdaq Composite fell 249.77 points, or 2.49%, at 9,770.57.
The S&P 500 had gone toward the third day of losses. This followed one of the fastest stocks rallies on record, with almost 490 shares dropping.
Moreover, airlines, cruise operators, and travel companies that surged in recent weeks bore the brunt of the selling. The KBW Bank Index fell as much as 7%. Energy shares joined a plunge in oil and Treasury 10-year yields fell to 0.67%, while the dollar jumped.
A day after the Federal Reserve provided a dour outlook for the economy, this report came out. The high U.S. jobless claims underscored the longer-term challenges caused by the pandemic.
The layoffs it caused reached 44.2 million in the United States even as businesses try to reopen. Analysts warn of continuing damage to the world’s largest economy.
Such massive layoffs have become a routine since the shutdowns beginning in mid-March, to stop the coronavirus from spreading. Though it has been declining since reaching their peak later that month. But the weekly total is still well above any figure seen during the global financial crisis back in 2008.
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