Stocks drop, but hold on to weekly gains after a big rally

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 percent lower, but still climbed 10.3 percent for the week, its biggest gain since March 2009. That follows two weeks of relentless selling. The Dow Jones

Industrial Average’s 12.8 percent weekly gain was its biggest since 1938, thanks largely to Boeing, which climbed 70.5 percent this week.

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 percent 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.

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 now surpassed those in China and Italy, climbing to more than 86,000 known cases, according to Johns

Hopkins University. The worldwide total has topped 550,000, and the death toll has climbed to more than 25,000, while more than 127,000 have recovered.

The latest bout of selling left the S&P 500 down 88.60 points, or 3.4 percent, to 2,541.47. The Dow slid 915.39 points, or 4.1 percent, to 21,636.78. The Nasdaq lost 295.16 points, or 3.8 percent, to 7,502.38. The Russell 2000 index of smaller company stocks fell 48.33 points, or 4.1 percent, to 1,131.99.