By Yasin Ebrahim
Investing.com - Wall Street fell sharply Friday, and is on track for a weekly loss as the spread of Covid-19 continues across to accelerate, forcing some states to pump the breaks on reopening efforts.
The Dow Jones Industrial Average fell 2.15%, or 554 points, the S&P 500 lost 1.71%, while the Nasdaq Composite slipped 1.62%.
A sea of red washed over stocks on Friday as investor hopes of quicker economic recovery were dealt a blow after a surge in coronavirus cases prompted Texas and Florida to scale back reopening efforts.
Texas' Governor called a temporary halt to its reopening on Friday, shutting bars back down and scaling back restaurant capacity to 50%.
That drastic move followed similar measures to combat the outbreak in Florida.
Florida suspended the consumption of alcohol on the premises at bars statewide.
Other states, including Alabama, California, Idaho, Mississippi, Missouri, Nevada, Oklahoma, South Carolina, and Wyoming, have reported a record daily increases in infections this week, taking the tally of new cases nationwide to 40,000 on Thursday, the highest one-day rise since the pandemic began.
Stocks tied to the progress of the economic reopening, including energy, industrials, and financials were among the worst hit, with latter coming under added pressure amid slump in bank stocks.
The Federal Reserve voted to prevent banks from buying back stock and limit their dividend payments in the third quarter, after stress tests – design to test the liquidity of banks under extreme adverse economic events – flagged concerns that "several banks would approach minimum capital levels" under a worse case pandemic scenario.
JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) fell more than 5%, while Goldman (NYSE:GS) slipped more than 7%.
Tech was roiled by a slump in shares of Facebook (NASDAQ:FB) and Twitter on fears about softer advertising revenue after Unilever (NYSE:UL) said it would be pausing brand advertising on Facebook, Instagram and Twitter in the U.S. through at least the year end.