three major indices closed out their worst day since mid-March during the regular session on Wall Street.
rising coronavirus cases in some parts of the country, and considered officials’ warnings of sustained economic damage due to the outbreak’s after-effects.
By Thursday’s close, the Dow dropped by around 7%, or 1,861 points, for the index’s worst day since March 16 and its fourth largest point-drop on record. Each of the S&P 500 and Nasdaq dropped more than 5% for their worst sessions since mid-March.
“Stocks were overdue for a pullback after rallying more than 40% off the March lows and pricing in what we believe is an overly optimistic economic outlook,” Jeff Buchbinder, equity strategist for LPL Financial, said in an email. “More COVID-19 spread in a few southern and western states and a gloomy outlook from the Fed provided the spark for some of the froth to come out.”
Officials in Houston, Texas suggested they were considering reestablishing stay-at-home orders amid the latest rise in local cases, with Texas having just reported its biggest one-day jump in cases since the pandemic began on Wednesday.” data-reactid=”20″>Increases in new coronavirus cases in some parts of the country contributed to investors’ worries during Thursday’s session, triggering the steep sell-off in risk assets and among travel and leisure stocks especially. Officials in Houston, Texas suggested they were considering reestablishing stay-at-home orders amid the latest rise in local cases, with Texas having just reported its biggest one-day jump in cases since the pandemic began on Wednesday.
Federal Reserve Chair Jerome Powell were still fresh in the minds of investors, with the head of the central bank underscoring concerns of a drawn-out recovery process. In his latest press conference Wednesday, Powell flagged the Fed’s “high level of uncertainty” about the economic outlook, and warned there could be a “good number of millions” of Americans sustaining longer-term unemployment due to virus-related disruptions.
Liz Ann Sonders, Charles Schwab chief investment strategist, told Yahoo Finance’s The Ticker on Thursday. “So I think it was just a recipe for some serious profit-taking, especially given where you’re seeing the weakness concentrated.”
1.54 million individuals filed new unemployment insurance claims last week, bringing the total over the past three months to more than 44 million. While this was the tenth straight week that new claims fell relative to the week prior, it still was more than double the peak in new claims at the worst point of the Great Recession.
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6:04 p.m. ET Thursday: Stock futures fall
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:05 p.m. ET:
S&P 500 futures (ES=F): 3,007.00, down 3.25 points or 0.11%
Dow futures (YM=F): 25,153, down 12 points, or 0.05%
Nasdaq futures (NQ=F): 9,604.00, down 12.75 points, or 0.13%
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