Wall Street’s main indexes have fallen, extending declines for the third straight session, as comments from President Donald Trump renewed worries over China-US trade relations and added to concerns of a prolonged economic downturn.
Trump said he was very disappointed with China over its failure to contain the novel coronavirus, saying the worldwide pandemic cast a pall over his US-China trade deal.
Wall Street’s fear gauge, the CBOE volatility index rose for the third straight day, hovering near a 10-day high.
Trade tensions are piling pressure on equities, Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago said. “They are certainly kicking the markets when we’re trying to recover from the virus’ economic hit.”
The three main stock indexes were headed for their worst week since mid-March as hopes of a quick recovery were doused by Federal Reserve Chairman Jerome Powell’s somber outlook on the economy and leading US infectious disease expert Anthony Fauci’s warning that the virus was not yet under control.
Economic readings continued to reflect the pain caused by the pandemic, as data showed 2.98 million people in the US filed for state unemployment benefits last week, higher than economists’ estimates.
However, this marked the sixth straight weekly drop in jobless claims, since topping 6 million in the final week of March.
The focus now turns to retail sales data on Friday that will reflect the impact of stay-at-home orders on the US consumer in April.
In early trading, the Dow Jones Industrial Average was down 456.65 points, or 1.96 per cent, at 22,791.32, the S&P 500 was down 53.10 points, or 1.88 per cent, at 2,766.90. The Nasdaq Composite was down 151.00 points, or 1.70 per cent, at 8,712.17.
All major S&P sectors were in the red on Thursday with energy, real estate and industrial posting the sharpest declines.
Beaten-down travel stocks tumbled again with the S&P 1500 airlines index down 8.0 per cent and hotel operator Marriott International Inc off 4.3 per cent.
Norwegian Cruise Line Holdings Ltd shed 9.2 per cent as it swung to a quarterly loss due to a virtual standstill in global travel earlier this year.
Bucking the trend, Cisco Systems Inc rose 4.5 per cent after beating quarterly revenue and profit estimates, as lockdowns globally boosted demand for its remote-work tools and networking equipment.
Declining issues outnumbered advancers for a 11.87-to-1 ratio on the NYSE and a 8.22-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 16 new lows, while the Nasdaq recorded nine new highs and 97 new lows.