BUSINESS

Wall Street Slumps As U.S. Sees Uptick In Coronavirus Cases

Investors fretted over a resurgence in coronavirus infections and a grim economic outlook from the Federal Reserve.
NEW YORK, USA - MAY 26: New York Stock Exchange (NYSE) building is seen with the Fearless Girl Statue during Covid-19 pandemi
NEW YORK, USA - MAY 26: New York Stock Exchange (NYSE) building is seen with the Fearless Girl Statue during Covid-19 pandemic in Lower Manhattan, New York City, United States on May 26, 2020. Wall Street trading floor partially reopening after coronavirus pandemic shutdown. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)

NEW YORK, June 11 (Reuters) - 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 were down about 5%, posting their worst day since mid-March, 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 3% or more.

“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.

Unofficially, the Dow Jones Industrial Average fell 6.88% to end at 25,132.25 points, while the S&P 500 lost 5.87% to 3,002.97.

The Nasdaq Composite dropped 5.19%, to 9,500.39.

Interest rate-sensitive banks dropped 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.

Boeing Co weighed heaviest on the Dow after its top supplier Spirit AeroSystems Holdings Inc announced a 21-day layoff for staff doing production and support work for Boeing’s 737 program.

(Reporting by Stephen Culp; additional reporting by Sinead Carew; Editing by Cynthia Osterman)