Dow slides 1,000 points on fears of coronavirus resurgence, more economic pain
Source: Washington Post
U.S. markets posted heavy losses Thursday as the Federal Reserve’s gloomy economic outlook, coupled with fears of a second wave of coronavirus infections, rattled investors. The Dow Jones industrial average fell 1,000 points, or 3.7 percent, by late morning, while the Standard & Poor’s and Nasdaq composites also dropped sharply.
That optimism was slashed Wednesday after Fed Chair Jerome H. Powell made plain that a slow recovery was to come and that more aid would be needed from Congress and the central bank to lessen the pain, particularly as millions of Americans may never see their jobs return. The Fed plans to keep the benchmark U.S. interest rate at zero, most likely through 2022. But critics say that approach widens economic inequality and lifts Wall Street over Main Street.
Concerns about a second surge of infections have taken on new urgency since states eased restrictions on gatherings and commercial business. Hospitalizations rose sharply in several states after Memorial Day, and nearly 2 million cases have been reported in the U.S. “Fears of a second wave are beginning to cause anxiety in the stock market,” said Torsten Slok, chief economist at Deutsche Bank Securities. “Powell did what he could to be dovish but there is nothing the Fed can do about the risk of a second wave of the virus.”
Another 1.5 million workers filed for unemployment insurance for the first time last week as pandemic-era totals top 40 million.
Read more: https://www.washingtonpost.com/business/2020/06/11/markets-today-fed-coronavirus/
Stocks flashed red around the world. In Europe, Britain’s FTSE 100 dropped 3.25 percent, and Germany’s DAX fell 3.5 percent. In Asia, Japan’s Nikkei 225 closed the day down 2.83 percent, and Hong Kong’s Hang Seng closed 2.27 percent in the red.
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