Wall Street plunges to close with biggest one-day loss since March 16
Thu Jun 11 2020
Lucy Harlow (3495 articles)

Wall Street plunges to close with biggest one-day loss since March 16

Wall Street plummeted on Thursday as investors reacted to renewed fears of a pandemic resurgence and digested dour economic forecasts from the U.S. Federal Reserve.

All three major U.S. stock indexes lost well over 5%, posting their worst one-day percentage drops since March 16, when markets were sent into freefall by the abrupt economic lockdowns put in place to contain the pandemic. The Nasdaq snapped a three-day streak of record closing highs.

The sell-off was broad, with all 11 major sectors of the S&P 500 falling from nearly 4% to well over 9%.

“There’s really no buy point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “It’s pretty much selling all the way through.”

Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, agreed.

“Everything’s for sale,” Ghriskey added. “There’s fear we’re near a top.”

Deaths of Americans from COVID-19 could reach 200,000 in September, a grim result of the United States’ economic re-opening before getting growth of new cases down to a controllable level, according to a leading health expert.

At the conclusion of its two-day monetary policy meeting on Wednesday, the U.S. Federal Reserve released its first pandemic-era economic outlook, after which Chair Jerome Powell warned of a “long road” to recovery.

“The Fed keeping rates steady through 2022 could give investors the impression that the Fed may be more concerned about the pace of economic recovery than originally anticipated,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.

Economic data appeared to back up the Fed’s gloomy economic projections, with jobless claims still more than double their peak during the Great Recession and continuing claims at an astoundingly high 20.9 million.

A year-on-year drop in core producer prices also reflected the central bank’s disinflationary concerns.

The CBOE volatility index , a barometer of investor anxiety, posted its largest one-day point gain since March 16.

Traders wear masks as they work on the floor of the New York Stock Exchange in response to the outbreak of the coronavirus disease (COVID19) in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson

The Dow Jones Industrial Average .DJI fell 1,861.82 points, or 6.9%, to 25,128.17, the S&P 500 .SPX lost 188.04 points, or 5.89%, to 3,002.1 and the Nasdaq Composite .IXIC dropped 527.62 points, or 5.27%, to 9,492.73.

Among the major S&P 500 sectors, energy .SPNY and financials .SPSY suffered the largest percentage drops, plunging by 9.5% and 8.2%, respectively.

Interest rate-sensitive banks .SPXBK slipped 9.6%, after the Fed indicated key interest rates would remain near zero through at least 2022.

Travel-related companies, among the hardest hit by mandated lockdowns, were sharply lower.

The S&P 1500 airlines index .SPCOMAIR tumbled 13.8%, while Norwegian Cruise Line Holdings Ltd (NCLH.N) and Royal Caribbean Cruises Ltd (RCL.N) dropped 16.5% and 14.3%, respectively.

Boeing Co (BA.N) was the heaviest weight on the Dow, shedding 16.4% after its top supplier Spirit AeroSystems Holdings Inc (SPR.N) announced a 21-day layoff for staff doing production and support work for Boeing’s 737 program.

The S&P 500 posted four new 52-week highs and no new lows; the Nasdaq Composite recorded 19 new highs and nine new lows.

Volume on U.S. exchanges was 15.31 billion shares, compared with the 12.83 billion average over the last 20 trading days.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe


Rules of Discussion on Live Index

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.