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Gloomy US economic outlook put N. American markets into tailspin

Gloomy US economic outlook put N. American markets into tailspin

Stocks on both sides of the border plummeted into the close, with all three US indexes recording their worst performances since March 16. The rising number of coronavirus cases in the United States has unnerved Wall Street. A second wave of infections could force many businesses to close again just after they reopened.

The Dow (INDU) closed 1,862 points, or 6.9%, lower. The index fell back below 26,000 points for the first time since the start of the month. The S&P 500 (SPX) ended down 5.9%, closing at its lowest total points since late May. Only one S&P stock, grocery chain Kroger (KR), closed in positive territory.

The Nasdaq Composite (COMP), which hit all-time highs on the first three days of the week, closed 5.3% lower. The index recorded three all-time highs in a row at the start of the week and finished above 10,000 points for the first time in history Wednesday, but on Thursday it fell back to a level not seen since late May.

In Canada the TSX was off by about 4 percent, losing 650 points and closing at 15,051.

US crude oil prices settled at $36.34 a barrel, down 8.2%.

The slump was in response to a speech yesterday by Chairman of the Federal Reserve Bank Jerome Powell who warned that the economic future was highly uncertain. Although Powell acknowledged that the May jobs report, which showed a 2.5 million jobs added to the economy, was a welcome surprise, he noted that many millions of Americans will never go back to their jobs and could remain unemployed for years.

Treasury Secretary Steven Mnuchin said the US economy wouldn’t be shut down again despite the rising case count. “We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage, and not just economic damage, but there are other areas,” he told CNBC in an interview. Mnuchin said more than a trillion dollars would be pumped into the economy over the next month, but his comments didn’t come in time to stem today’s stock drop.

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