Wall Street Close: Pessimism mounts and stocks don't like it
|- The Dow Jones Industrial Average lost 525.05 points, or 1.92%.
- The S&P500 dropped 78.65 points, or 2.37%.
- The Nasdaq Composite also fell 330.65 points, or 3.02%.
US stocks ended up in the red again on Wednesday and the dollar hit its strongest level in two months.;
Invrstors are increasingly concerned by the prospects of the lack of stimulus in the run up to the US elections that will clash with flu season and the spread of the coronavirus.
The economic outlook is under scrutiny pertaining tot he concerns that new restrictions to counter coronavirus infections will hurt the recovery.
Consequently, the Dow Jones Industrial Average lost 525.05 points, or 1.92%, to 26,763.13, while the S&P500 dropped 78.65 points, or 2.37%, to 3,236.92. The Nasdaq Composite also fell 330.65 points, or 3.02%, to 10,632.99.
Business activity, as per the US preliminary Markit PMI data, has shown a stable measure but will employment softening.
The manufacturing PMI was 53.5, as expected, up from 53.1.
The services PMI was 54.6, down from 55.0. The composite employment sub-index fell by 0.8 points to 54.1, aligning with other data showing a slowing in job creation.
Analysts at ANZ bank noted that Federal Reserve's Chair Jerome Powell said that the economy would likely need more support and that there’s a long way to go to achieve an economic rebound.
Vice Chairman Clarida also spoke, saying that the Fed will not “even begin to think about lifting off [rates]… until we actually get observed inflation… equal to 2%,” and that the Fed could keep rates at the current level beyond that.
He emphasised that the improvement in inflation is likely years away and that they don’t want just a fleeting glimpse above the target. He also said that additional fiscal support will likely be needed.
We also heard from Boston Federal Reserve Presedent Eric Rosengren who was particularly pessimistic:
- Fed Rosengren: Likely to face a credit crunch toward the end of this year if banks come under stress
SP 500 levels
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