June 24, 2020 / 2:40 PM / 17 days ago

US STOCKS-Wall Street slides on virus worries, grim economic forecast

(For a live blog on the U.S. stock market, click or type LIVE/ in a news window)

* Big U.S. banks slip in early trade

* Carnival’s credit rating cut to junk status by S&P

* Indexes off: Dow 1.47%, S&P 1.33%, Nasdaq 1.09% (Updates to open)

By Medha Singh and Devik Jain

June 24 (Reuters) - Wall Street’s major indexes fell on Wednesday as investors weighed the risk to domestic economy from rising coronavirus cases and a worsening forecast of the damage from the pandemic.

Washington state made face masks mandatory in public places, while many other U.S. states saw record cases, including Arizona and Texas, where restrictions meant to slow the spread of the disease were lifted early.

The top U.S. infectious disease official Anthony Fauci has said the next two weeks could be critical in containing the outbreak.

The International Monetary Fund said the pandemic was causing wider and deeper damage to economic activity than first thought, and it slashed forecast for a contraction in global output to 4.9% from 3.0%.

Advanced economies have been particularly hard hit, with U.S. output now expected to shrink 8.0%, more than 2 percentage points worse than the April forecast.

“The rising number of coronavirus cases we’re continuing to see in the United States is a major concern despite the Trump administration’s previous refusal to lockdown the economy again,” said Craig Erlam, market analyst at OANDA in London.

“There will be significant resistance to restrictions being reimposed, but the fear is that they are left with no other option.”

A slate of better-than-feared economic reports, easing lockdowns and massive stimulus measures have powered the Nasdaq to an all-time high and put the benchmark S&P 500 on track for its best quarterly performance since 1975.

The S&P 500 and Dow Jones Industrials are just about 7% and 11.5% from their respective February record closing highs.

At 10:00 a.m. ET, the Dow Jones Industrial Average was down 385.20 points, or 1.47%, at 25,770.90, the S&P 500 was down 41.54 points, or 1.33%, at 3,089.75, and the Nasdaq Composite was down 109.97 points, or 1.09%, at 10,021.40.

Battered U.S. airlines, resorts and cruise operators fell again, with the S&P 1500 airlines index down 4.4% and Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd off more than 9%.

Carnival Corp also declined 9% as ratings agency Standard & Poor’s downgraded its bonds to junk status, forecasting continued weak demand for the cruise industry. Bank stocks, which tend to outperform when the outlook for the economy improves, slipped about 2.9%.

On the other hand, Dell Technologies Inc jumped 7.3% after a report said the company was considering spinning off its roughly $50 billion stake in cloud computing software maker VMware Inc. VMware advanced 4.1%

Declining issues outnumbered advancers more than 6-to-1 on the NYSE and 4-to-1 on the Nasdaq.

The S&P index recorded one new 52-week high and no new low, while the Nasdaq recorded 30 new highs and four new lows. (Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below