Wall Street plunges, with Dow closing down 900 points as lockdown fears accelerate
Wall Street sank again on Wednesday, as soaring coronavirus infection rates pushed some cities to introduce a new round of restrictive measures and France and Germany reintroduced monthlong lockdowns.
The Dow Jones Industrial Average closed down by around 940 points Wednesday afternoon, its worst day since June. The blue-chip index lost all gains for October, falling well below the 27,000 mark after a volatile session. The S&P 500 and the Nasdaq composite index both ended the day down by around 3.6 percent.
“The stock market is reacting to a surge in coronavirus cases and a lack of stimulus that together threaten to hamstring the economic recovery. Election uncertainty isn’t driving this,” said Greg McBride, chief financial analyst at Bankrate.
Covid-19 infections are spreading across the United States at the fastest rate since the start of the pandemic, according to the latest NBC News figures. The 71,000 new cases per day that the U.S. averaged over the past week was the most in any seven-day stretch since the crisis started.
Market participants are focused on the extent to which the uptick in coronavirus cases could stall any economic recovery. Officials in Illinois said Tuesday they would extend restrictions in Chicago to include the suspension of indoor dining and a size limit on gatherings.
Starting Tuesday, nonessential businesses in the city of Newark must close by 8 p.m., that city's mayor announced this week. Beauty salons and barber shops will now be by appointment only, and gyms will be closed for 30 minutes in every hour for sanitization.
Rising coronavirus cases across Europe are exacerbating a global loss of confidence in a swift economic recovery. German Chancellor Angela Merkel announced new lockdown measures on Wednesday, closing restaurants, bars, recreation centers, pools, and cinemas for one month and limiting travel and large events.
"We are in a very serious situation," Merkel said at a press conference. "We must act, and now, to avoid an acute national health emergency."
French President Emmanuel Macron on Wednesday night also announced a nationwide lockdown, in a televised address to the nation.
“The virus is circulating in France at a speed that even the most pessimistic forecast didn’t foresee,” Macron said. “The measures we’ve taken have turned out to be insufficient to counter a wave that’s affecting all Europe.”
The moves would follow similar restrictions implemented over the past few weeks in Italy and Spain.
“Many people still haven’t realized what is waiting for us. This wave is invading Europe… it will last several weeks, even one or two months,” said Jean-François Delfraissy, president of the scientific committee advising the French government, in an interview with French radio station RTL.
Seven months into the pandemic, companies are still attempting to right-size their workforce. Boeing reported its fourth straight quarterly loss Wednesday morning and announced thousands more job cuts. The ailing aircraft manufacturer said it would be cutting a further 7 percent of its workforce, with a goal of reducing its total headcount by 30,000 to 130,000 by the end of next year.
"We have to make the adjustments that we’ve got to make," Boeing CEO David Calhoun told CNBC in an interview Wednesday morning. "Those rates are appropriate to everything that I know. We’re hoping the economic recovery comes sooner rather than later."
Investors are also parsing news that there will be no fresh round of fiscal stimulus before the election.
House Speaker Nancy Pelosi, D-Calif., on Tuesday ended any hopes of a Covid-19 relief bill before Election Day, blaming the White House for failing "miserably," in a letter to House Democrats.
For his part, Trump acknowledged that there would be no deal until the election is over.
“After the election, we will get the best stimulus package you have ever seen,” Trump said Tuesday. “I think we are going to take back the House because of her.”
