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Special: Battle Against Novel Coronavirus
Fears of a second wave of novel coronavirus infections in the US and uncertainty about another federal stimulus to support the economy sent the stock market lower Monday. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite have fallen for three weeks in a row — the longest slide since 2019. "Investor sentiment is increasingly focused on the prospect of a coronavirus-led economic decline lasting longer than expected," Manish Shah, CEO of Miami-based Tollbooth Strategy, told China Daily. "There's a slow but growing recognition of consumer withdrawal from the economy, a falling labor-participation rate and a fear of collapse that may extend well into 2022. The broad and deepening fear of the crisis-led economic downturn is unnerving investors." Monday's losses were marketwide. Twenty-nine of the 30 stocks that comprise the Dow index declined, as did the 11 sectors tracked by the S&P 500. But the tech-heavy Nasdaq escaped sharp declines. On Monday, the Dow dropped 579.57 points, or 2.1 percent. The S&P 500 fell 44.60 points, or 1.34 percent. The Nasdaq Composite lost 14.48 points, or 0.13 percent. In intraday trading, the Dow fell as much as 800 points. Still, it was the worst day for the Dow since Sept 8, when it lost 2.3 percent. Monday was the first session since February that the S&P 500 posted losses four days in a row. Monday's decline further eroded the market's performance in September. Overall, the Dow has lost about 4.5 percent from its high this month. The S&P 500 is off about 6 percent. The Nasdaq Composite had dropped 8.5 percent. Oil, a proxy for future economic activity, also fell Monday. West Texas Intermediate crude, the benchmark for US prices, lost 3.6 percent to $39.76 a barrel. Oil stocks declined. Exxon Mobil fell 2.47 percent in Monday's trading. Chevron lost 2.54 percent. ConocoPhillips dropped 4.21 percent. Investors fear that consumers, uncertain about the future, will reduce spending and create another wave of jobless claims as retailers, suppliers and manufacturers cut back. Initial jobless claims had totaled more than 1 million a week through late August and have hovered at about 900,000 for the last few weeks, government statistics show. The recent drop in new claims is a huge improvement from the 6.9 million initial jobless claims filed in late March, but unemployment remains significantly above the highest level prior to this year in records dating to the 1960s. Overall, employers have rehired about 11 million of the 22 million workers who lost their jobs in March and April when the economy was largely shut down as part of the effort to curb spread of COVID-19. Congressional Democrats and Republicans have not agreed on another round of relief spending. An extra $600 a week in unemployment benefits expired July 31. Democrats say the increased benefit is needed to help unemployed workers pay their bills, but Republicans believe the extra money is a disincentive to return to work and therefore will slow the recovery. Travel, leisure and retail stocks — the sectors that would benefit most from a federal stimulus —were pummeled Monday. Southwest Airlines dropped 5.85 percent. United Airlines slid 8.60 percent. Delta Air Lines fell 9.20 percent. Hotel operator Marriott International skidded 6.87 percent. Carnival, an operator of cruise ships, fell 6.73 percent. MGM Resorts International lost 4.18 percent. Macy's fell 6.66 percent. Kohl's lost 8.12 percent. But box-box retailer Walmart rose 1.32 percent and discount chain Target gained 0.7 percent. Bank stocks, which reflect the broad economy, were also hit. Bank of America lost 2.94 percent. JPMorgan Chase fell 3.09 percent. Wells Fargo dropped 4.34 percent. |
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