Stocks tumble as economic swoon, coronavirus spike leave investors fretting

U.S. equity markets plunged Thursday morning after the Federal Reserve warned of a slow economic recovery and a number of states reported a resurgence in COVID-19 infections.

The Dow Jones Industrial Average tumbled 904 points, or 3.35 percent, while the S&P 500 and the Nasdaq Composite dropped 2.75 percent and 2.3 percent, respectively.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 26157.23 -832.76 -3.09%
SP500 S&P 500 3106.99 -83.15 -2.61%
I:COMP NASDAQ COMPOSITE INDEX 9824.488709 -195.86 -1.95%

The major averages finished mixed on Wednesday, with the Nasdaq closing above 10,000 for the first time, after the Federal Reserve said interest rates would remain near zero through 2022 to support the economic recovery.

Initial jobless claims for the week ended June 6 totaled 1.5 million, the government said Thursday, boosting the total number of job losses to 45 million since the shutdowns began in mid-March.

Meanwhile, Arizona and Texas were among the states that saw the number of new COVID-19 cases hit a new high on Wednesday while others, like California and Florida, saw infection counts near their previous peaks.

Looking at stocks, airlines, cruise operators and hotels were in the crosshairs amid fears a new wave of infections could stunt a rebound in bookings.

Drugmaker Regeneron Pharmaceuticals began human testing for an experimental COVID-19 treatment. The company will know the effectiveness of its antibody cocktail within a month.

The announcement comes after Reuters reported just before Wednesday’s closing bell that fellow drugmaker Eli Lily said one of its treatments could be authorized by September, so long as trials go well.

Ticker Security Last Change Change %
LLY ELI LILLY & COMPANY 150.86 -0.14 -0.09%

Meanwhile, financial institutions remained under pressure for a second day as investors worried an extended period of low interest rates would hurt profitability. Banks typically boost profitability by passing interest-rate increases on to borrowers more quickly than depositors, the main source of their cash. Periods of declining or unchanged rates stymie that practice.

Ticker Security Last Change Change %
JPM JP MORGAN CHASE & CO. 101.06 -5.00 -4.71%
C CITIGROUP INC. 52.54 -3.32 -5.94%
WFC WELLS FARGO & COMPANY 28.02 -1.69 -5.69%

In the food sector, GrubHub is merging with Amsterdam-based Just Eat in an all-stock deal that values the Chicago-based online food-delivery platform at $75.15 a share, or $7.3 billion. The deal comes after merger talks between GrubHub and ridesharing app Uber collapsed last month amid regulatory concerns.

In retail, Target hiked its quarterly dividend by 3 percent, or 2 cents, to 68 cents per share.

Ticker Security Last Change Change %
GRUB GRUBHUB INC 63.43 +4.38 +7.41%
UBER UBER TECHNOLOGIES INC. 32.62 -2.21 -6.36%
TGT TARGET CORP. 120.39 +0.39 +0.32%

West Texas Intermediate crude oil sank 3.21 percent to $38.33 a barrel while gold shot up 1.03 percent to over $1,738 an ounce.

U.S. Treasurys saw modest gains, pushing the yield on the 10-year note down by 4.3 basis points to 0.705 percent.

In Europe, France’s CAC paced declines, down 3.46 percent, while Germany’s DAX and Britain’s FTSE dropped 3.33 percent and 3.13 percent, respectively.


Markets were lower across Asia, with Japan’s Nikkei sliding 2.82 percent, Hong Kong’s Hang Seng off 2.27 percent and China’s Shanghai Composite down 0.78 percent.

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