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Stocks retreat as House passes $2 trillion stimulus package


U.S. stocks pulled back Friday following three straight days of gains as the House approved a massive coronavirus relief package for the U.S. economy.

The Dow Jones Industrial Average slumped 930 points, as the U.S. eclipsed China as the global leader in virus cases. The Standard & Poor’s 500 fell 3.4%.

Traders say the passage of a $2.2 trillion fiscal stimulus bill has helped drive the stock market’s double-digit percentage gains this week. Congress and the Federal Reserve have promised an astonishing amount of aid for the economy and markets, hoping to support them as the pandemic shuts down more businesses each day.

The House approved the $2.2 trillion coronavirus economic rescue package Friday, which was passed by the Senate late Wednesday. President Donald Trump plans to sign the bill.

“Now that the fiscal policy is in place and the Treasury has done what they need to do, the attention will turn back to the health crisis,” Wayne Wicker, chief investment officer at Vantagepoint Investment Advisers, said in a note. “Investors have to consider how problems due to lack of business activity will be resolved. That is the big, open-ended question that took this market down.”

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Trader David O'Day works on the floor of the New York Stock Exchange, Monday, Aug. 19, 2019. Technology stocks were leading indexes higher on Wall Street after the U.S. gave Chinese telecom giant Huawei another 90 days to buy equipment from American suppliers.

Despite strong rallies this week, analysts say further big drops are to be expected until there have been enough sustained gains in the market, and progress in fighting the pandemic, to ease investors’ fear of further declines.

The U.S. on Thursday surpassed China for the most confirmed cases of the virus. More confirmations are expected as the U.S. ramps up testing. The U.S. counted more than 92,000 cases of coronavirus on Friday, with at least 1,380 deaths, according to the Johns Hopkins University data dashboard. More than 566,000 people are known to have been infected globally, and roughly 25,000 have died. 



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