Stocks falter as US cases climb
Death toll from virus surpasses 4,500
U.S. stocks tumbled Wednesday at the start of a new quarter, as rising numbers of coronavirus cases from the pandemic dampened the outlook for the global economy.
The Dow Jones Industrial Average shed 973.65 points to close at 20,943.51, a day after the blue-chip index posted its worst first quarter ever. The Standard & Poor’s 500 sank 4.4% to finish at 2,470.50. All of the 11 sectors in the broad index ended lower, led by declines in financial, real estate and utility shares.
The losses come as President Donald Trump warned Americans to brace for a “hell of a bad two weeks” as the White House projected there could be 100,000 to 240,000 deaths in the U.S.
The U.S. coronavirus death toll surpassed 4,500 Wednesday. Worldwide, there are more than 46,000 deaths and more than 921,000 confirmed cases. The U.S., which has now surpassed China’s death toll, has surpassed 200,000 confirmed cases, according to the Johns Hopkins University data dashboard.
Traders say lingering uncertainty over how long the shutdown may last has made forecasting U.S. growth difficult as a new quarter begins. On Tuesday, Goldman Sachs economists projected the U.S. economy would contract 34% in the second quarter, but they expect economic activity to rebound in the third quarter.
“It is now all but inevitable that we will see a deep contraction in economic activity in the U.S. as a result of the shutdown implemented to contain the virus,” Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle Investments, said in a note. “What we are experiencing now is the equivalent of putting a patient in a medically-induced coma – a calculated, temporary risk with the goal of establishing greater longer-term health.”
Financial companies came under pressure after banks in Europe like Royal Bank of Scotland, HSBC and Barclays announced they were scrapping dividend payments, bringing their share prices sharply lower. JPMorgan Chase, Wells Fargo and Goldman Sachs shed at least 6%.
Investors are looking to Friday’s U.S. jobs report, which will likely show a sharp drop in payrolls. Companies soon will begin reporting their earnings results for the first quarter.