Stocks finished Wednesday trade deeply in negative territory, with the three main indexes registering declines of at least 4% and a gauge of small-capitalization stocks tumbling 7% to start April and a new quarter.
Investors pinned the day’s downbeat action partly to President Donald Trump, who warned late Tuesday of a “very, very painful” two weeks ahead for the country in face of a rapidly spreading COVID-19 pandemic.
The pandemic has raised fears the world’s largest economy is experiencing an unprecedented disruption to industries, small businesses and households, resulting in the worst quarterly performance for U.S. equities since 2008.
What are major indexes doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.97% fell 973.65 points, or 4.44%, to 20,943.51. The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.48% slipped 114.09 points, or 4.41%, to 2,470.50, led by sharp declines in real estate /zigman2/quotes/207325179/composite XLRE -1.02% and utilities /zigman2/quotes/206645117/composite XLU -1.78% , both off by at least 6%, as investors fear that people won’t make rent or utility payments.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.12% shed 339.52 points, or 4.41%, to 7,360.58.
The small-capitalization Russell 2000 index /zigman2/quotes/210598147/delayed RUT +1.06% , saw even more severe losses, finishing the session off 81.11 points, or 7%, to end at 1,071.99.
Stocks also ended lower on Tuesday, capping a quarter that saw stocks tumble from February records into a bear market at record speed. The Dow logged a 23.2% quarterly fall, its biggest first-quarter drop on record and biggest quarterly decline since 1987. The S&P 500 fell 20% for its biggest quarterly selloff since the final three months of 2008. The Nasdaq Composite fell 14.2% for the quarter.
What’s driving the market?
The uncertainty about when the U.S. can return to usual business has unnerved investors struggling to ascertain the ultimate economic impact of social curbs put in place amid the COVID-19 outbreak. Without a clear view on the timeline of a U.S. recovery, volatility was likely to remain heightened in the coming weeks, said market participants.
“Everything hinges on how long we are in this shutdown,” said Anwiti Bahuguna, head of multiasset strategy at Columbia Threadneedle Investments, in an interview. “We don’t know how long the shutdown may last, so it’s hard to predict what U.S. growth will look like.”
Also unsettling investors was President Donald Trump’s warning late Tuesday that a “very, very painful” two weeks lies ahead for the country. The White House released new projections for 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic even if current social distancing guidelines are maintained.
The number of COVID-19 cases world-wide rose to 922,00 on Wednesday, while the number of deaths rose to at least 46,000, according to data from Johns Hopkins University. The U.S. has the most number of cases world-wide, at 203,608, and 4,476 deaths.