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Stocks lose 6% on Wall Street as more businesses shut doors
Source: Associated Press
Stocks lose 6% on Wall Street as more businesses shut doors
By STAN CHOE
40 minutes ago
NEW YORK (AP) — Stocks lost more than 6% on Wall Street Monday as huge swaths of the economy come closer to shutting down due to the coronavirus outbreak, from airlines to restaurants. Emergency actions taken by the Federal Reserve late Sunday to prop up the economy and get financial markets running smoothly again may have raised fears even further, some investors said.
The selling began immediately on Wall Street, and losses were sharp enough at the open to trigger a temporary trading halt for the third time in the last two weeks. The losses had been even steeper earlier in the morning, and they spread around the world. European stocks and crude oil were down 5% or more. The world’s brightest spot may have been Japan, where the central bank announced more stimulus for the economy, and stocks still lost 2.5%.
The spreading coronavirus is causing businesses around the world to shut their doors. While that can slow the spread of the virus, it’s also taking cash out of the pockets of businesses and workers. That has economists slashing their expectations for upcoming months, and JPMorgan Chase says the U.S. economy may shrink at a 2% annual rate this quarter and 3% in the April-through-June quarter. To many investors, that meets the definition of a recession, and the question is how long it will last.
The best-case scenario for many investors is that the economic shock will be steep but short, with growth recovering later this year after businesses reopen. Pessimists, though, are preparing for a longer haul.
Strategists at Goldman Sachs say the S&P 500 could drop as low as 2,000 in the middle of the year, which would be a 41% drop from its record set just a month ago. Goldman expects the index to rally back to 3,200 at year end.
-snip-
By STAN CHOE
40 minutes ago
NEW YORK (AP) — Stocks lost more than 6% on Wall Street Monday as huge swaths of the economy come closer to shutting down due to the coronavirus outbreak, from airlines to restaurants. Emergency actions taken by the Federal Reserve late Sunday to prop up the economy and get financial markets running smoothly again may have raised fears even further, some investors said.
The selling began immediately on Wall Street, and losses were sharp enough at the open to trigger a temporary trading halt for the third time in the last two weeks. The losses had been even steeper earlier in the morning, and they spread around the world. European stocks and crude oil were down 5% or more. The world’s brightest spot may have been Japan, where the central bank announced more stimulus for the economy, and stocks still lost 2.5%.
The spreading coronavirus is causing businesses around the world to shut their doors. While that can slow the spread of the virus, it’s also taking cash out of the pockets of businesses and workers. That has economists slashing their expectations for upcoming months, and JPMorgan Chase says the U.S. economy may shrink at a 2% annual rate this quarter and 3% in the April-through-June quarter. To many investors, that meets the definition of a recession, and the question is how long it will last.
The best-case scenario for many investors is that the economic shock will be steep but short, with growth recovering later this year after businesses reopen. Pessimists, though, are preparing for a longer haul.
Strategists at Goldman Sachs say the S&P 500 could drop as low as 2,000 in the middle of the year, which would be a 41% drop from its record set just a month ago. Goldman expects the index to rally back to 3,200 at year end.
-snip-
Read more: https://apnews.com/bd3276744b861e2669fd761733e9d2b4
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