Wall Street Pulls Back at No Progress
Wall Street saw its worst week as US markets continued to slide. An unprecedented blank check from the Federal Reserve and $1.8 trillion stimulus package failed to slow a two-week purge. Investors expect to see signs of progress in combatting COVID-19 pandemic.
U.S. stock markets have declined after another failure from the Senate to advance from a $1.8 trillion coronavirus rescue package. The fed has committed to unlimited bond purchases to help the US economy.
The Dow Jones industrial average and Standard & Poor’s 500 Index have put in their worst weekly declines on Wall Street. The Nasdaq Composite Index has also been in freefall with the two. This has been their worst since the 2008 financial crisis.
The blue chips lost close to 600 points, or 3%, pushing the index more than 37% off its highs. This is Blue Chip stocks’ worst month since the Great Depression.
Investors Want to See Signs of Progress
Wall Street pulled back after a massive coronavirus rescue bill failed the second time. Randy Frederick, VP of trading and derivatives at the Schwab Center, said the market has been looking for progress. Investors are looking for signs the virus is slowing or that we have effective treatments or a vaccine.
“This is a medical issue and we are trying to solve it with financial measures. If we’re looking for a rebound, the market needs some positive health news which they don’t see yet,” he added.
The central bank said it would purchase Treasuries and mortgage-backed securities. It was willing to go beyond the $700 billion in new purchases. Futures on Wall Street rose during stock trading after the announcement; however, the surge was short-lived.
Howard Silverblatt of S&P Dow Jones Indices said the volatility tells him that markets have not hit the bottom. “We have some way to go,” he added.
Kristina Hooper, the chief global market strategist at Invesco, said she is not surprised to see a dramatic reaction by markets. Ed Yardeni, president of Yardeni Research, said the U.S. must slow the spread of the virus immediately.
Markets hate uncertainty, said Sarat Sethi of Douglas C. Lane & Associates. Congress not being able to provide a stimulus and investors hoping on slowing the virus cause additional pressure on stocks.
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