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Dow plunges 1,300 points despite promises for virus aid

U.S. stocks dropped sharply Wednesday as coronavirus lockdowns and travel restrictions expanded, rattling investors despite Washington’s promises for economic aid.

The Dow Jones industrial average tumbled 1,300 points, while the Standard & Poor’s 500 sank 5.3%. Stocks had stabilized a day earlier after President Donald Trump promised aid to get the U.S. economy through the outbreak.

Investors need to see the number of infections slow before markets can find a bottom, analysts say. The number of new cases reported in China, where the virus emerged in December, is declining but infections in the United States, Europe and elsewhere are increasing.

“There’s no clarity. We don’t know what the real effects from these monetary and fiscal policies are going to be for a while,” says Rich Sega, global chief investment strategist at asset manager Conning. “We need to see data that shows that the infection rate has peaked.”

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Trader John Romolo works on the floor of the New York Stock Exchange, March 5, 2020.

The White House proposal could approach $1 trillion in spending to ward off the damage of business closures to contain the virus. The Federal Reserve has announced more measures to keep financial markets operating. The central bank said late Tuesday it would revive its crisis-era Primary Dealer Credit Facility that allows large financial institutions access to short-term loans.

Treasury Secretary Steven Mnuchin said Trump wants to send checks to Americans in the next two weeks to help support them while more parts of the economy come closer to shutting down.

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