Wall Street ends down on Powell's sober outlook, call to Congress for help
By Sinéad Carew New York (Reuters) - The S&P 500 closed lower for the second day in a row after Federal Reserve Chairman Jerome Powell warned on Wednesday of extended economic weakness due to the coronavirus pandemic and called for Congress to agree on additional fiscal support. Stocks sold off as investors appeared to price in a deeper economic downturn than they had previously expected as they worried that Powell's call for additional stimulus would go unanswered
By Sinéad Carew
New York (Reuters) - The S&P 500 closed lower for the second day in a row after Federal Reserve Chairman Jerome Powell warned on Wednesday of extended economic weakness due to the coronavirus pandemic and called for Congress to agree on additional fiscal support.
Stocks sold off as investors appeared to price in a deeper economic downturn than they had previously expected as they worried that Powell's call for additional stimulus would go unanswered.
While Powell pledged in a webcast to use the U.S. central bank's power as needed, he suggested that it might not be enough to avoid deep economic damage without more fiscal support.
"He's saying if you want to avoid a slow recovery and long-term economic damage you need a strong fiscal response, effectively placing that responsibility back over to governments instead of central banks," said Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey.
And divisions among Republicans and Democrats appear to have dimmed the prospects for additional fiscal support from Congress, according to Jeff Kleintop, chief global investment strategist at Charles Schwab.
Market participants said they were relieved by Powell's indication that the Fed would not push interest rates below zero but some seemed taken aback by his downbeat view on the economy.
Schwab's Kleintop said Powell's tone was more pessimistic than in the recent past. "The market took away that maybe there's more bad news out there than they'd been pricing in," he said.
Powell's comments followed a sharp selloff in equities on Tuesday after a warning from leading U.S. infectious disease expert Anthony Fauci that the virus was not yet under control. Fauci's comments prompted concerns about how the economy would emerge from weeks of virus-related lockdowns.
The depth of Wednesday's decline was due to the combination of Fauci's comments and Powell's warning, TD Ameritrade's Cruz said: "The biggest implication is that some of the economic activity we've lost may never be recovered."
Another negative factor was a decision by an independent board overseeing billions in federal retirement dollars that it would indefinitely delay plans to invest in some Chinese companies.
"It adds to the tension ahead of an announcement Trump said could come this week on the Phase One (U.S.-China) trade deal," said Schwab's Kleintop.
Unofficially, the Dow Jones Industrial Average <.DJI> fell 519.97 points, or 2.19%, to 23,244.81, the S&P 500 <.SPX> lost 50.15 points, or 1.75%, to 2,819.97 and the Nasdaq Composite <.IXIC> dropped 139.38 points, or 1.55%, to 8,863.17.
Investor bets on a swift recovery had helped the three main U.S. stock indexes climb about 30% from their March lows.
But as officials around the world and in parts of the United States began easing lockdown rules with a view to restarting local economies fears of a second wave of COVID-19 infections have diminished those hopes.
Royal Caribbean Cruises Ltd
(Additional reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Cynthia Osterman)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Both were trying to free their motorcycle from the rail track when the accident occured, SP (City) Martand Prakash Singh said
NEW YORK (Reuters) -The price of cryptocurrencies plunged and crypto trading was delayed on Tuesday, a day in which El Salvador ran into snags as the first country to adopt bitcoin as legal tender. Shares of blockchain-related firms also fell as crypto stocks were hit by trading platform outages. But the major focus was on El Salvador, where the government had to temporarily unplug a digital wallet to cope with demand.
By Joseph White and Sanjana Shivdas (Reuters) -The head of Apple Inc's car project, Doug Field, is going to work for Ford Motor Co to lead the automaker's advanced technology and embedded systems efforts, a hiring coup for Ford Chief Executive Jim Farley.