New York Stock Market Collapses Again Due to COVID-19... Dow Down 6.9% (Comprehensive)

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. New York stock market collapsed again in the face of the resurgent novel coronavirus infection (COVID-19). Although economic indicators showed a favorable trend, concerns over the increasing number of COVID-19 infections struck the market hard. The three major indices of the New York stock market experienced their worst day since March.

On the 12th (local time), the Dow Jones Industrial Average fell 6.90% (1,861.82 points) to close at 25,128.17, the S&P 500 dropped 5.89% (188.04 points) to 3,002.10, and the Nasdaq Composite plunged 5.27% (527.62 points) to finish at 9,492.73.

Even the Nasdaq, which had surpassed 10,000 points just a day before to reach an all-time high, bowed to the might of COVID-19.

On that day, the New York stock market showed weakness from the opening and failed to rebound, continuing to slide. Especially after 3 p.m., near the market close, the decline widened, recreating the downturn seen in early March and putting investors on edge.

Last week’s initial jobless claims, reported before the market opened, decreased to 1.54 million, continuing a downward trend, but this had little impact.

Rather, the market was pressured as concerns over a second wave of COVID-19 intensified, following the U.S. Federal Reserve’s (Fed) statement the day before that the pace of economic recovery remains uncertain until a COVID-19 vaccine is developed.

Fed Chair Jerome Powell emphasized the uncertainty of the economic recovery pace during a press conference after the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged. The Fed also projected a negative 6.5% growth rate for the U.S. economy this year.

The Institute for Health Metrics and Evaluation (IHME) at the University of Washington School of Medicine released a predictive model indicating that by October 1, the number of COVID-19 deaths in the U.S. could reach 169,890, delivering a decisive blow to the market.

Compared to the 113,168 COVID-19 deaths reported by Johns Hopkins University on the same day, this means approximately 57,000 more deaths could occur by October 1.

IHME predicted that daily deaths would steadily decrease until July but then sharply surge in September, effectively forecasting a second wave of COVID-19.

The resurgence of COVID-19 in the U.S. is also reflected in statistics. Citing its own data, CNN analyzed that COVID-19 hospitalizations increased in at least 12 states following the Memorial Day holiday at the end of last month.

In North Carolina, the number of COVID-19 hospitalizations reached a peak of 812 on the 11th. Hospitalizations increased after Memorial Day in Alaska, Arkansas, Arizona, California, Kentucky, Mississippi, Montana, Oregon, South Carolina, Texas, and Utah as well.

CNBC reported that the U.S. stock market experienced its worst day since March. MarketWatch explained that fears of a second wave of COVID-19 combined with the Fed’s gloomy outlook caused the market to plummet.

As the market declined from the opening, U.S. President Donald Trump attempted to defend it via Twitter, but the market ignored his remarks. President Trump said, "The Fed has often been wrong. I have seen the same numbers but have done better than they have. After a good third quarter and a great fourth quarter, next year will be the best year ever. We will soon see vaccines and treatments. That’s my opinion. Let’s watch."

By individual stocks, Boeing and United Airlines, which had shown strength on expectations of economic reopening, fell 16% and 9%, respectively, while IBM and Goldman Sachs plunged 9%. Microsoft, which led the Nasdaq’s rise, dropped 5.4%, and Apple and Alphabet each fell about 4%.

This content was produced with the assistance of AI translation services.