STOCKS’ UP WEEK ENDS LOWER
Wall Street closed lower Friday but still notched big gains for the week as investors held out hope that a $2 trillion rescue package will cushion businesses and households from the economic devastation being caused by the coronavirus.
The S&P 500 closed 3.4% lower, but still climbed 10.3% for the week, its biggest gain since March 2009. That follows two weeks of relentless selling. The Dow Jones Industrial Average’s 12.8% weekly gain was its biggest since 1938.
Stocks had soared over the previous three days as the relief bill moved closer to becoming law. It passed the House Friday afternoon and President Donald Trump signed it later in the day. The bill includes direct payments to households, aid to hard-hit industries like airlines and support for small businesses. Despite the help, analysts expect markets to remain turbulent until the outbreak begins to wane.
Even after the rally this week the market is still down 25% from the peak it reached a month ago. The outbreak has forced widespread shutdowns that has ground much of the U.S. economy to a halt. This week more than 3 million people filed for unemployment benefits, shattering previous records. It’s the first of what is sure to be many grim signs of the toll the virus is taking on the economy.
“The key at this point is getting a handle on the spread of the virus so that then we can start to think about what (economic) growth looks like for the remainder of the year,” said Willie Delwiche, investment strategist at Baird.
Investors have yet to get a clear picture of exactly how badly the coronavirus crisis has hurt corporate profits, the ultimate driver of stock prices. Very few companies have dared to issue forecasts capturing the damage, though traders are girding for discouraging results in the next few weeks as earnings reporting season begins. Many companies have simply withdrawn their profit forecasts altogether.
The latest bout of selling left the
S&P 500 down 88.60 points, or 3.4%, to 2,541.47. The Dow slid 915.39 points, or 4.1%, to 21,636.78. The Nasdaq lost 295.16 points, or 3.8%, to 7,502.38. The Russell 2000 index of smaller company stocks fell 48.33 points, or 4.1%, to 1,131.99.