Stocks descended deeper into their month-long funk Wednesday as the nation entered one of its most dire periods in memory.
Coronavirus deaths are continuing, vast swaths of the population are stuck in their homes and tens of millions are hurting while the health crisis squeezes the economy.
Wednesday’s waterfall plunge in stock markets says Wall Street is bracing for economic damage after just finishing one of its worst quarters ever.
Investors read President Donald Trump’s admonition on Tuesday that the country should be prepared for a “a hell of a bad two weeks” as a signal that the economy would not be spared in the upcoming carnage.
“We are in for shockingly bad labor market numbers in Thursday’s unemployment claims,” said Luke Tilley, chief economist at Wilmington Trust. “We are in for the sharpest quarterly decline in economic activity that we have ever seen.
“And the recovery in the second half of the year is going to be slow, challenging and disappointing.”
The Dow Jones industrial average finished Wednesday’s session with a 973-point loss, about 4.4 percent, at 20,943, as investors bake in more bad news on the coronavirus front.
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The Standard & Poor’s 500 dropped 113 points, or 4.4 percent, to close at 2,470. The tech-heavy Nasdaq gave back 340 points, or 4.4 percent. The Nasdaq finished close the session at 7,360.
All three indexes are deep in the hole for 2020 after hitting record highs a few weeks ago. The Dow has lost 26 percent since the start of the year. The S&P has lost 23 percent and the Nasdaq is down 17 percent.
Though analysts had cautioned that more volatility was in the cards this week, there were some optimistic signs Tuesday that pointed to a V- or U-shaped recovery by late summer. Consumer confidence fell, but not as sharply as expected. Oil for most of the day was climbing, a signal of consumer demand, until those advances were washed out.
Goldman Sachs forecast a troublesome second quarter — with as much as 15 percent unemployment in the late spring and early summer — but a ferocious comeback when the economy zooms back to normal.
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