US stocks extended losses at the close of yesterday’s trading session as news came that US retail sales had dropped 8.7% from February to March, according to a report from the Commerce Department.
The Dow Jones, S&P 500, and NASDAQ fell 1.9%, 2.2% and 1.4%, respectively. The Dow is now currently trading at 23,400 points.
This news comes as no surprise, as the global lockdown has quickly stopped people from being able to go anywhere or spend any of their money. While grocery store sales were the only sector to see an increase, as expected, other sectors such as electronics, food service, and especially clothing and accessories stores all dropped.
This report release is one of the first indications of the economic impact that the coronavirus pandemic has caused in the US. The NFP release at the start of this month only covered the 8-14th of March, and although the figures released were in the negatives, did not fully reflect the scope of the virus’ impact. The first state to enter lockdown, California, only did so on the 20th March.
Stocks had been making a rebound in recent weeks, as investors were spurred on by optimistic comments made by US President Donald Trump, who said that he would announce guidelines to reopen the US economy on Thursday, claiming that the US had passes the peak of its coronavirus infections. Trump also suggested that some US states could end lockdown and open again by May 1st. However, these comments come just a day after Anthony Fauci, the leading scientist of the coronavirus task force, said that early May was too optimistic a date to reopen state borders.
All three of the major stock indices had managed to recover the catastrophic losses made since the virus properly first hit the States and threw the markets into chaos, causing unprecedented volatility and the Dow Jones to drop below 20,000 points and erasing all gains made since Trump’s inauguration.
However after peaking at 24,000 points in the previous trading session, the Dow has once again moved to the downside, following a barrage of new data yesterday that has shown just how bad the economy is at the moment.
Apart from the retail sales figures, the US Federal Reserve also reported that industrial production has fallen the most since the days of the Second World War. Also fuelling concern was the news of two banking giants in the US, Citigroup and Bank of America, dropping in share prices as well. Citigroup shares dropped 5.6%, while BoA’s fell by 6.5%. Following on from this, we can only continue to see such figures continue as data reports are released.
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