Stocks Down After Short-Lived Jump
Stocks fell Friday morning, giving back some gains after Thursday’s session saw each of the S&P 500 and Dow climb more than 6%. A new report showed consumer sentiment tumbled by the most since the financial crisis in March.
Losses on the three major indices Friday tracked declines in European equities, after EU member countries failed to agree on a concrete plan to address the coronavirus outbreak in the region.
Countries including Italy, Spain and France – those hit hardest by the outbreak – had called for the joint issuance of so-called “coronabonds” to help raise funds through issuance of shared European debt, but other member countries struck down the relief move during last night’s discussions. An announcement that UK Prime Minister Boris Johnson tested positive for COVID-19 also weighed on risk assets.
During the regular session Thursday, stocks ended higher for a third straight day as investors hoped a $2 trillion relief package passed by the U.S. Senate would help offset some of the domestic economic damage dealt by the coronavirus outbreak. It was the first time the S&P 500 posted three consecutive sessions of advances since mid-February.
The House of Representatives is set to vote on the coronavirus economic relief package Friday.
Stocks’ gains during Thursday’s session, which came even after the U.S. Labor Department reported the largest number of new weekly unemployment claims on record, sent the Dow 1,351 points higher to settle above the 22,500 level – more than 20% above its recent closing low from March 23.
While policymakers around the world have stepped up their efforts to mitigate the economic blow from the virus, the pandemic itself has showed few signs of abating outside of China. Italy, one of the epicenters for the outbreak, reported its largest jump in new cases in the last five days, with new cases Thursday rising by 6,153.
Global cases of the coronavirus topped 549,000 as of Friday morning, including 86,000 in the U.S, according to Johns Hopkins data. At that level, the number of cases in the U.S. topped those in China and Italy for the first time, and the domestic death toll from the outbreak surpassed 1,100.
As states across the country remain in or go into lock-down, President Donald Trump sent a letter to governors Thursday suggesting the White House was seeking to create guidelines for individual counties classified as either high, medium or low risk for the outbreak to expand further. Trump has said he wants the country to widely reopen businesses by Easter in mid-April, although health officials have suggested lifting stay-in-place orders by that time could be premature as the coronavirus case count continues to climb.
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