Stock market takes another hit, but this week’s a winner
NEW YORK» 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 pandemic.
The S&P 500 index closed 3.4% lower, but still climbed 10.3% for the week, its biggest gain since March 2009. That followed two weeks of relentless selling. The Dow Jones industrial average’s 12.8% weekly gain was its biggest since 1938, thanks largely to Chicago-based Boeing, which climbed a whopping 70.5% this week.
Stocks soared for three days this week as the relief bill moved closer to becoming law. It passed the House on Friday afternoon; President Donald Trump signed it later in the day. The bill includes direct payments to households, aid to hard-hit industries such as airlines and support for small businesses. Despite the help, analysts expect financial 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 just a month ago. The outbreak has forced widespread shutdowns that have ground much of the U.S. economy to a halt. This week, more than 3 million Americans 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 national 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, an investment strategist at Baird.
The push to deliver financial relief is taking on more urgency as the outbreak continues to widen. The number of cases in the U.S. has surpassed those in China and Italy, climbing to more than 86,000 known cases, according to Johns Hopkins University.
The worldwide total of cases has topped 550,000, and the death toll has climbed to more than 25,000, while more than 127,000 have recovered.
For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.
Investors have yet to get a clear picture of exactly how badly the 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.