The New York Stock Exchange ended sharply lower again Wednesday, anxious about several news about the spread of the coronavirus pandemic and its economic consequences.
Its flagship index, the Dow Jones Industrial Average, lost 4.44% to finish at 20,943.51 points.
It has just recorded its worst month since 2008, in the midst of a financial crisis, and its worst quarter since 1987.
The highly technological Nasdaq fell 4.41% to 7,360.58 points, and the broad S&P 500 index also fell 4.41% to 2,470.50 points.
Market players “had to digest some rather scary information about the coronavirus,” notes Gregori Volokhine, of Meeschaert Financial Services.
US President Donald Trump has painted a grim picture of the days to come, saying Tuesday evening that the next two weeks would be “very, very painful”.
The White House has estimated that the disease would kill between 100,000 and 240,000 people in the country if current restrictions are respected.
China, on the other hand, published Wednesday for the first time the number of people currently positive for the new coronavirus but asymptomatic, that is to say without the cough and fever characteristic of Covid-19. What “strengthen information from US intelligence that China has largely underestimated the cases so far,” said Volokhine.
Already in the red at the start of the session, the Wall Street indices were a little more nosedive when the governor of New York State announced that the peak of new cases in the state may not occur before the end of April and when that of the State of Florida finally ordered the general confinement of its 21 million inhabitants.
“It was one of the last large states not to have imposed strict containment measures, where the economy continued to function more or less,” said Volokhine.
The very nature of the current situation is unprecedented insofar as the recession is not caused by a financial crisis or an energy shock but by measures of social distancing forcing people to stay at home and businesses to close, notes Art Hogan of National Holdings.
This characteristic may allow a rapid rebound, especially if the economic support measures of governments and central banks are implemented quickly and efficiently, believes the expert.
But “until the number of new cases reported peaks, as is the case in China and South Korea, we will likely remain in a roller coaster-like market environment,” said Hogan. .
On the bond market, the 10-year rate on the American debt fell further and moved to 0.5988%, against 0.6695% on Tuesday at the close.
– Macy's leaves the S&P 500 –
In terms of values, Xerox (-7.07%) announced Tuesday evening that it had abandoned its offer of $ 36 billion to buy the American manufacturer of personal computers and printers HP (-14.52%).
The company managing the S&P 500 index has also announced that the department store chain Macy's (-9.78%) will be removed from the index after the close on Friday as its capitalization is only 1 $ 5 billion.
United Technologies (-3.14%) will disappear as such from the index following its merger, which must be finalized on April 3, with Raytheon (-6.65%). The S&P 500, on the other hand, will integrate the two subsidiaries resulting from the vast reorganization of United Technologies, Carrier and Otis.
The oil majors ExxonMobil and Chevron lost 1.16% and 5.38% respectively. According to sources familiar with the matter, their bosses, along with other sector leaders, will meet with Donald Trump at the White House on Friday to discuss the state of the oil industry, which is currently hampered by the drop in oil prices.