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Dow Slumps on Fears Rising Covid Cases Could Trigger Second Wave of Pain

Published 06/11/2020, 03:31 PM
Updated 06/11/2020, 03:50 PM
© Reuters.

By Yasin Ebrahim

Investing.com – The Dow plunged Thursday, suffering its biggest one-day decline since March, as a jump in new Covid-19 infections that threatens to slow down the pace of the reopenings prompted investors to ditch stocks and flee to safety.  

The Dow Jones Industrial Average fell 6.90%, or 1,861 points. The S&P 500 fell 5.27%, while the Nasdaq Composite slumped 5.27%. 

New coronavirus cases increased by 20,486 from 17,376 yesterday, the Center for Disease Control reported, taking the total infections nationwide to 2 million with nearly 116,00 dead so far.

With new infections on the rise, investors were forced to assess whether their recent bets on the swift rebound in the economy may have been overdone just a day after the Federal Reserve's gloomy outlook on the economy.    

Energy stocks, travel, energy, and bank stocks, which together had been pushed on the progress of the economic reopening, bore the brunt of selling, sending the broader market sharply lower.

Citigroup (NYSE:C) fell 13%, Wells Fargo (NYSE:WFC) was down 9.8% and JPMorgan (NYSE:JPM) fell 8.3%, pressured by falling Treasury yields and fresh fears that a long road to economic recovery could force banks to sock away more cash to offset loan defaults.

American Airlines (NASDAQ:AAL), United Airlines (NASDAQ:UAL), Delta Air Lines (NYSE:DAL), Carnival (NYSE:CCL), and Norwegian Cruise (NYSE:NCLH) were among the biggest decliners in travel.

Losses in energy, meanwhile, were exacerbated by a slump in oil prices as concerns about demand persisted a day after the U.S. reported that weekly crude supplies swelled to a record last week.

Technology, which has held firm in recent days, also came under pressure, paced by a decline in FANG stocks and chipmakers.

The Philadelphia Semiconductor Index slumped 6%, led by declines in Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Micron Technology Inc (NASDAQ:MU).

On the economic front, the labor market continues to steady, with initial jobless claims falling to 1.5 million in the week ended June 6, less than the 1.6 million expected.

"On the heels of last week’s better-than-expected May employment report, this morning’s continued decline in the pace of weekly claims reinforces the notion the U.S. labor market is on the mend – or at least noticeably improving from more massive weakness reported earlier in Q2," Stifel added.

Latest comments

Stop the fear mongering. Everyones last the COVID BS. Let the market move!
why do you keep a negative, 20 hour old story up?? are you trying to talk dow the market or just too lazy to update??
nonsense. first wave isnt even over and the market went sky high. ridiculous how manipulated that is.congratulatiobs to the private investors who managed to ride this fake wave made by the corrupted system
Greed did this
First wave never ended. Pull your heads out.
so the second wave of corona hoax continue ,lol
I know 3 people who have died, all in the NY/NJ area. Ask their families if covid is a hoax. You should consider spending more time reading more science about Covid instead of writing comments.
so what ,people die from different causes too, I know nobody dude , sorry for any deaths ! Almost 3 000 000 American die every year ! 2018 , 41 000 000 got sick with flu , 80 000 died . Corona ******are phony numbers dude .
I have done that and I say , it is a hoax . Fear virus they should call this ********.Same ********was in 2009 with swine flu !
Sometimes pain is REQUIRED.
You can only blame JPow that he painted a gloomy picture yesterday as a hint for market correction. Lol
The market was overbought, and still is after today’s selloff. It is funny to see Firday’s futures up, and tomorrow morning will be a sucker’s rally to sell. The market will sell off on Friday afternoon in fear that over this weekend Covid hospitalizations will continue to grow at alarming rates in states which opened too early, thus putting the “reopening of America” at risk.
all  fake news by Goldman Sachs to unload the shorts they got caught in
if it is the truth, FBI should close down GS and depot the leaders to China, they're fighting against the country
Looks like the smart money decided to turn their longs into shorts for the next week and then long again
It was Robinhood money taking beaten-up travel and low-priced (and nearly bankrupt company) stocks up, thus forcing the smart money to cover their existing shorts in those names. So you get 20% moves in airlines, cruise operators, etc. Now they’re putting on their shorts again cuz no one will be flying “normally” for years, especially on the long routes used in business travel. No company would fly their employees on a trip to China from NYC, or to Europe from the US West Coast.
This is a continuation of the correction of the market that actually was interrupted by the FED and its fake pumping of the market.
This is more like taking out the profit that some made. They interpret everything as they like. In a few days, they will be back to buy low.
Yes, but don’t be tricked into buying into Friday’s early rise in the markets. It will be obliterated by the afternoon cuz no one wants to hold positions over the weekend with Corona hospitalizations increasing in many states that were too early in opening up. If retail, travel etc stocks quickly rebound, sell into it.
Greedy investors actes like all has passed and now scared. How this can be over if we don't have a vaccine
It’s not over at all, despite that stocks will rally on Friday morning cuz people think they’re getting stocks on sale. The rally will get sold in the afternoon, if not before lunch. We’re now only back to levels last reached on May 10. There’s a long way to go on the downside.
go protest even more
The DOW slumps? Do you really think that's an appropriate headline?
This is not the second wave. This is still the first wave that is prolongued because it that was badly managed. Second wave wil be ib the fall of 2020.
Like a fat guy at a pool party, DOW said, "Hey guys hold my beer!"
Profit taking. Bargain hunting will come around the 200ma
Dow slumps on a breakdown of the printing machine at the Fed. Looking for ink.
They are all playing jedi mind tricks !
The first shutdown was all wasted. People don't care and join large gatherings so there will be a full 2nd wave coming in the next couple of weeks.
Totally agree. People are thinking that the virus is gone. Guess they’re not from NY or NJ. ICUs are starting to fill up in Arizona and other sates that opened up too early without proper safety and social distancing. Not gonna be pretty.
Thanks Fauci....
yup definitely blame fauci its his fault that he doesn't want to put the usa a few trillion more in debt. how dense are you?
if you don't know what to do, do nothing. it's ok.
Investing is bad
Right! That's why I speculate.
Good
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