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US Stocks Struggle as Second Quarter Starts With Trump Warning of ‘Painful’ Turn in Fight Against COVID-19

US stocks slumped Wednesday, struggling at the start of the second quarter of 2019 with investors spooked by a grim warning that US deaths from COVID-19 are set to substantially climb.The Dow Jones Industrial Average saw just two of its 30 stocks rise intraday, while all 11 sectors tracked by the Standard & Poor’s 500 dropped. Real estate shares gave up 7% while the consumer staples group lost a more modest 1.2%. The Dow’s intraday gainers were consumer goods maker Procter & Gamble (PG) and retailer behemoth Walmart (WMT).

President Donald Trump late Tuesday warned that the next two weeks in the country’s fight against the virus will be “painful” as the White House’s modeling projected coronavirus-related deaths could reach up to 240,000 with social-distancing measures. The death toll in the US currently stands around 4,100, according to Johns Hopkins University.

Wall Street also started Wednesday’s session with fresh data about economic damage from the virus. Figures in Asia showed manufacturing activity plunged throughout the region in March. Meanwhile, US private payrolls contracted by 27,000 last month, ADP said, but noted that the smaller-than-expected decline was from a tally as of March 12, before an acceleration in job losses.

“In terms of the virus, investors know that we are currently in the midst of a surge in diagnosed cases and, unfortunately, deaths,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute, in a note Wednesday. He said most medical experts foresee new coronavirus cases starting to decrease in mid-May.

“Should the timeline for a decrease in the number of new virus cases extend into August or September, the resulting social distancing practices would dampen consumer spending for longer than currently expected and stocks would likely react quite negatively from current levels.”

Among corporate movers, Home Depot (HD) fell 2.4% after the retailer said stores will close earlier as part of temporary measures stemming from the virus outbreak. Macy’s (M) fell about 5% as the department store operator will be dropped from the S&P 500 before trading opens on April 6. Macy’s, which is hurting from the virus outbreak, will move to the S&P SmallCap 600 index.

T-Mobile US (TMUS) rose about 3% as the mobile services company said it has completed the $26.5 billion acquisition of Sprint (S). But HP (HPQ) slid 9% after Xerox (XRX) late Tuesday said it’s dropping a $30 billion tender offer to acquire the tech hardware heavyweight because of market turmoil spurred by the pandemic.

In afternoon trading, the S&P 500 fell 3.9%, the Dow was 3.6% lower and the Nasdaq Composite was down by 3.9%.

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