The Dow Jones Industrial Average traded as much as 800 points lower today before paring a small portion of those losses after the U.S. hit a record number of daily coronavirus cases over the weekend.
On the worst day since the “Black Monday” market crash in 1987, in mid-March, DOW dropped nearly 3,000 points, when President Donald Trump said the worst of the outbreak could last until August.
August is now long gone, and the U.S. has reported more than 83,000 daily new infections in the past two days, surpassing the July record of 77,300 new daily cases. Nearly half of the states have reported their daily record high of COVID-19 cases in the month of October alone.
On the national level, hospitalizations have also been rising with more than 41,753 people admitted as of Sunday, compared to 36,428 the Sunday before.
Today is the biggest one-day tumble since early September when the Dow plunged 800 points.
Compared to the Dow’s previous close at 28,533.57 on Friday, it closed today 650 points down, at 27,685.38.
The travel and hospitality sectors took the heaviest hit.
Wynn Resorts was down 6% and Royal Caribbean saw its shares shed 5.7%.
American Airlines was down 7%, Delta Airlines was down 2.8%, and Boeing fell 2.6%.
Oracle stock was down by 3.3%, while American Express shares were down 2.8%. Microsoft shares dipped 0.8%.
However, the same as at the beginning of the pandemic, certain companies are going to benefit from the news on record-high new infections. Amazon shares increased 1%, while Zoom gained 4.5%.
Adding to virus concerns, the market also reacted to the failing hopes that a stimulus deal would be reached before the election.
Talks continued through last week between House Democrats and the Trump administration, but a final agreement remains elusive.
Even though federal aid has been repeatedly mentioned during campaign rallies, the two sides cannot agree on major issues such as coronavirus testing, jobless benefits and state and local funding.
The market may also be pricing in what is being perceived--rightly or wrongly--as the White House’s capitulation to COVID-19.
White House chief of staff Mark Meadows told CNN on Sunday that the U.S. was "not going to control" the coronavirus pandemic.
"We are not going to control the pandemic. We are going to control the fact that we get vaccines, therapeutics and other mitigation areas," Meadows said.
Since the start of the pandemic, more than 8 million Americans have been infected with COVID-19 and there have been more than 225,000 fatalities.
Recent research by the University of Washington’s Institute for Health Metrics and Evaluation (IHME) said that winter weather will drive Americans indoors and that the U.S. could see more than 500,000 total deaths by the end of February if states continue to ease pandemic restrictions.
“We think the key point here is that there’s a huge winter surge coming. At this point, the wave isn’t fully preventable, but “expanding mask use is one of the easy wins for the United States,” Christopher Murray, a lead author on the paper said.
Authors of the research also claim that mask-wearing compliance could reduce a projected death toll over the next four months by 130,000 people.
By Tom Kool for Safehaven.com
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