Business & Economy

Dow suffers biggest 1-day drop since March

New York, Jun 11 (efe-epa).- Wall Street’s blue-chip Dow 30 index closed down 6.9 percent on Thursday, its biggest one-day drop since March, as investors fled to safety amid concerns about a second coronavirus wave and the Federal Reserve’s pessimistic outlook for the United States’ economy.

The Dow, which had climbed to 27,572.44 on Monday, its highest closing price since late February, has fallen 9 percent over the past three trading sessions and currently stands at 25,128.17 after a 1,861-point drop on Thursday.

Among the Dow components, aircraft manufacturer Boeing’s share price plummeted 16.42 percent, Dow Inc. sustained a 9.91 percent drop, IBM tumbled 9.13 percent, Goldman Sachs shed 9.08 percent and ExxonMobil dropped 8.83 percent.

The S&P 500 large-cap index fell by 188.04 points, or 5.89 percent, to 3,002.10; the tech-heavy Nasdaq, which had soared to record highs in three consecutive trading sessions earlier this week, was down by 527.62 points, or 5.27 percent, at 9,492.73.

Although share prices had climbed steadily in recent weeks due to optimism about the gradual US economic reopening, investors have taken to the exits in recent days after an increase in confirmed coronavirus cases in the states of Texas, Arizona, California and Florida.

Nationwide, the number of confirmed cases has now passed the 2 million threshold, while the amount of deaths attributed to Covid-19 in the US stands at more than 113,000, according to the latest figures from Johns Hopkins University’s Coronavirus Research Center.

A key fear for US markets is that states will impose new stay-at-home orders and again require non-essential businesses to close in a bid to contain the spread of the respiratory disease, although Treasury Secretary Steven Mnuchin on Thursday morning ruled out the possibility of shutting down the American economy a second time.

Wall Street also reacted negatively to the Federal Reserve’s pessimistic projections for the US economy.

The central bank decided Wednesday to hold interest rates steady at a target range of between 0 percent and 0.25 percent and forecast that the US economy will contract by 6.5 percent in 2020.

Federal Reserve Chairman Jerome Powell, for his part, played down the surprise addition of 2.5 million jobs in May and said he foresees a long, slow recovery.

Among the S&P 500’s 11 sectors, energy fell most sharply (down 9.45 percent), followed by financials (-8.18 percent), materials (-7.74 percent) and industrials (-7.05 percent).

Companies in the travel industry were especially hard hit.

American Airlines, whose share price had more than doubled over the past two weeks, has fallen sharply since Monday and plunged 15.51 percent on Thursday.

Carnival Corp. has sustained double-digit losses the past two days, including a 15.3 percent decrease on Thursday. EFE-EPA


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