Reuters
- US stocks tanked on Thursday as cautious commentary from the Federal Reserve and rising coronavirus infection rates prompted investor concern.
- Texas, Florida, Arizona, and California all reported strong upticks in case counts or hospitalizations, increasing the odds of a much-feared second wave of COVID infections.
- The Federal Reserve said on Wednesday that the pandemic could result in permanent economic damage and an extended period of high unemployment.
- Oil dove as well, with West Texas Intermediate crude trading as much as 8% lower.
- Watch major indexes update live here.
US equities plummeted on Thursday as investors grew warier of rising coronavirus case counts and mulled cautious commentary from the Federal Reserve.
A much-feared second wave of COVID infections is becoming more likely in some states as reopening efforts continue. Texas reported its third-straight day of record coronavirus hospitalizations, while Florida notched its worst weekly increase in cases. Arizona and California also revealed spikes in new cases on Wednesday. The surging case counts pushed the US total above 2 million.
Traders also weighed Fed Chair Jerome Powell’s comments on Wednesday, where he said the pandemic could result in permanent economic damage and an extended period of high unemployment. He cautioned that, despite May’s better-than-expected jobs report, “it’s a long road” to labor-market recovery.
Still, the Fed signaled its willingness to continue economic stimulus efforts, saying it will leave rates near zero for an extended period and continue multibillion-dollar bond purchases.
Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Thursday:
- S&P 500: 3,107.89, down 2.6%
- Dow Jones industrial average: 26,171.31, down 3% (819 points)
- Nasdaq composite: 9,808.87, down 2.1%
Weekly jobless claim data backed up Powell’s sentiment. Roughly 1.5 million Americans filed for unemployment insurance last week, the Labor Department announced Thursday. The reading brings the 12-week total to 44 million. Continuing claims, which track Americans receiving unemployment benefits, slid slightly from the prior week to 20.9 million.
Some of the day’s biggest losers were those that gained the most on reopening hopes. Carnival Cruises, Royal Caribbean, and Norwegian Cruise Line all plunged in early trading. Airline stocks including Delta, American, and United slid sharply as well%. Gap and Kohls were among the biggest losers in the retail sector.
Early moves in Cboe’s VIX index mirrored the stock market’s sharp downturn. The stock market “fear gauge” spiked as much as 12.7% early Thursday, breaching 30 for the first time since late May.
Oil tanked through the session amid the wider risk-off attitude. West Texas Intermediate crude sank as much as 8%, to $36.4 per barrel. International benchmark Brent crude slumped 6.6%, to $38.96, at intraday lows.
Now read more markets coverage from Markets Insider and Business Insider:
Hertz reveals delisting notice from NYSE, placing fate of mad-dash rally in pending appeal
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
