Dow ends 2.8% lower on worries about surging coronavirus cases

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A view of the New York Stock Exchange in New York, June 26, 2020. PHOTO: EPA-EFE

NEW YORK (AFP) - Wall Street stocks sank on Friday (June 26) as surging coronavirus cases prompted large US states to impose new public health restrictions, threatening the economic recovery following widespread business shutdowns.

The Dow Jones Industrial Average plunged 2.8 per cent, or 730 points, to 25,015.55.

The broad-based S&P 500 tumbled 2.4 per cent to 3,009.05, while the tech-rich Nasdaq Composite Index shed 2.6 per cent to 9,757.22.

Texas and Florida, which together are home to 50 million people, ordered bars to stop serving alcohol on site, along with other measures following huge jumps in virus cases.

"We are facing a serious problem in certain areas," top infectious disease expert Anthony Fauci said Friday as the Trump administration's coronavirus task force held its first public briefing in two months.

The actions by Texas and Florida will weigh on economic activity in the states, and also raised fears that business reopenings will be paused elsewhere, jeopardising the US economy's already wobbly state.

But there were other significant factors in Friday's rout, which pushed all three major indices into the red for the week.

Large banks including Bank of America and Goldman Sachs fell more than 6 per cent after the Federal Reserve late on Thursday ordered the industry to suspend buybacks and limit dividend payments amid uncertainty over the coronavirus.

Facebook dove 8.3 per cent as it faced a widening boycott from major advertisers due to criticism it has not done enough to crack down on hate speech and incitements to violence.

Chief executive Mark Zuckerberg announced new measures shortly after Unilever joined Verizon among large companies in suspending spending on the platform, saying Facebook would ban a "wider category of hateful conduct."

Dow member Nike dropped 7.6 per cent as it reported a surprise US$790 million (S$1.1 billion) loss amid a steep drop in revenues as the pandemic forced stores closed.

But Gap surged 18.8 per cent after it announced a new venture with Kanye West that will sell West's Yeezy brand in the chain's stores.

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