U.S. stocks tumbled into the red around noon, failing to hold strong early gains, and despite a couple of attempts to rebound into positive territory, ended on a weak note on Friday.
Optimism about economic recovery in the wake of recent strong data on employment and retail sales set up a firm start for stocks. A Bloomberg report that said China will likely accelerate purchases of American farm goods to comply with the phase one trade deal helped as well in setting up a firm start for the market.
However, reports showing a surge in coronavirus infections in several states in America and the World Health Organization’s warning that the pandemic is “accelerating and the world is in a new and dangerous phase” unsettled the market.
Among the major averages, the tech-heavy Nasdaq managed to eke out a small gain, settling 3.07 points or 0.03 percent up at 9,946.12. The Dow slumped 208.64 points or 0.80 percent to settle at 25,871.46, while the S&P 500 slid 17.60 points or 0.56 percent to 3,097.74.
The Dow and the S&P 500 added about 1% and 1.9%, respectively in the week, while the Nasdaq jumped 3.7% in the week.
The Trump administration has declared there will not be another shutdown, but Apple Inc. (AAPL) announced that it is temporarily shuttering stores again in U.S. states where the novel coronavirus cases have been spiking in recent weeks.
Texas and Arizona reported record spikes in new cases on Friday. Florida, California, South Carolina and North Carolina were among the other states to report a ump in new cases of virus infections today.
Boeing (BA), Cisco Systems (CSCO), Nike (NKE), General Electric (GE), IBM (IBM) and Coca-Cola (KO) were some of the major losers in the session.
The market also reacted to Boston Federal Reserve President Eric Rosengren’s remarks that the U.S. economy may not see a fast recovery and that it would need more support from the Fed and Congress. He made these comments in a webcast to the Providence Chamber of Commerce.
“Unemployment remains very high, and because of the continued community spread of the disease and the acceleration of new cases in many states, I expect the economic rebound in the second half of the year to be less than was hoped for at the outset of the pandemic,” Rosengren said.
In overseas trading, stock markets across the Asia-Pacific region ended higher on Friday as optimism about a possible global economic recovery helped offset worries about a second wave of coronavirus infections.
The major European markets ended as optimism about economic recovery after the European Union’s proposal for a massive fiscal stimulus helped offset concerns about virus infections, and prompted investors to pick up stocks.
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