Stocks Skid on Virus Surge

Fearless Girl, a bronze sculpture by Kristen Visbalthe, with a PPE mask on in front of the New York Stock Exchange in the Wall Street Financial District of Manhattan New York May 19, 2020. (Photo by TIMOTHY A. CLARY / AFP) /
Photo by TIMOTHY A. CLARY / AFP

U.S. stocks skidded Wednesday as a surge in coronavirus cases revived fears that consumers might retreat or that state governments could shutdown the economy once again. Bond prices rose and the dollar strengthened.

The Dow Jones Industrial Average fell 710 points, a 2.72 percent decline, to 25445.94. The S&P 500 slumped 2.6 percent. The Nasdaq Composite tumbled 2.19 percent. The Russell 2000 index of smaller public companies, which has been especially volatile during the outbreak, fell 3.45 percent.

New coronavirus cases have surged higher in several states, including Arizona, California, and Texas. Florida cases soared by 5,508 on Tuesday, a record jump for the state. Governors in California, Texas, and Florida have all said that they would up enforcement of social distancing rules on businesses and social gatherings.  New York, New Jersey, and Connecticut announced that they would require quarantining for visitors from outbreak hotspots Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Utah, Texas and Washington.

President Trump is slumping in most polls, which might also be a negative for stocks if investors believe that his Democrat rival, Joe Biden, would be worse for the economy or corporate profits.

All 11 sectors of the S&P were down Wednesday. The energy sector, down 5.54 percent, was the worst performing sector, followed by industrials, financials, and materials. Utilities and consumer staples were the best performing sectors. That suggests fears economic sluggishness.

Yields on all-but the shorteast maturity Treasuries fell slightly, with the steepest declines in far end of the curve. Falling yields indicates rising prices for bonds.

 

 

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