Stocks tumbled on Wednesday, erasing back-to-back gains from earlier in the week, as investors were confronted by new signs of the coronavirus pandemic’s persistence.
The S&P 500 fell more than 2 percent, with shares of retailers, airlines and cruise companies — which are proxies for sentiment about the prospects of a return to normal — faring poorly.
Nervousness about the economic outlook was evident in oil prices, and shares of energy companies also declined.
German officials this week reimposed local lockdowns after an outbreak at a slaughterhouse infected more than 1,500 people. In the United States, a surge in new cases in states including Arizona, Florida and Texas have prompted new warnings about the dangers of the pandemic. More than 35,000 new coronavirus cases were identified across the country on Tuesday, according to a New York Times database, the highest single-day total since late April and the third-highest total of any day of the pandemic.
States are discouraging people from gathering in public and even reimposing some limits on activity. New York, New Jersey and Connecticut said on Wednesday that they would begin requiring out-of-state visitors entering their states to quarantine for two weeks upon arrival if they were coming from one of the country’s new hots pots.
The risk to investors is that a resumption of limits on travel, shopping or other activities that might further the spread of the virus will take a toll on corporate profits and the economy. For now, no state government has imposed the kind of limits that were in place in April and May but that could change as cases mount and hospitals reach capacity.
Houston’s intensive-care units are filled to 97 percent of capacity, Mayor Sylvester Turner told the City Council on Wednesday, with Covid-19 patients accounting for more than one-quarter of all patients in intensive care. Apple later said it would close its stores in the city as a precaution.
Underscoring concern over the impact of the virus, the International Monetary Fund on Wednesday revised its forecast for global economic growth sharply lower. The I.M.F. now expects the global economy to shrink by 4.9 percent, compared with a 3 percent prediction in April. The recovery will also be slower than earlier expected, the fund said.
The decline on Wednesday followed back-to-back gains on Wall Street that had lifted the Nasdaq composite to a record high. Led by large technology stocks like Apple and Amazon, the Nasdaq has outpaced the broader market in recent days, but it was also sharply lower on Wednesday.
The New York Times
