By Yasin Ebrahim
Investing.com – Wall Street plunged on Tuesday, as rising coronavirus cases continued to force parts of the U.S. to roll back reopening measures that could hurt the economy's chances of a robust recovery.
The S&P 500 lost 1.04%, while the Nasdaq Composite lost 0.86% and the Dow Jones Industrial Average slumped 1.51%.
Rising cases in 41 out of 50 states have forced pockets of the U.S. to pump the brakes or reverse reopening measures to contain the spread of coronavirus, which has infected about 3 million and killed 133,000 nationwide.
San Francisco delayed the reopening of outdoor bars and indoor restaurants that were slated to return on July 13. In New Jersey, Gov. Phil Murphy said he would pause efforts to reopen the state after the coronavirus infection rate rose above the key threshold of 1.0.
Other parts of the U.S. have also followed suit, with Connecticut Gov. Ned Lamont announcing on Monday he would halt the state's third reopening phase that was scheduled to start in mid-July.
The World Health Organisation warned it would not "be a surprised" if the global death toll from the coronavirus begins to rise following an increase in infections.
"If you imagine that somewhere in April and May we were dealing with 100,000 cases a day, today we’re dealing with 200,000 cases a day, and that is not purely a result of testing," Mike Ryan, executive director of the WHO’s emergencies program said.
The rolling back of reopening plans in some states has proved a major blow to airlines hoping for a rebound in travel demand.
United Airlines (NASDAQ:UAL) warned weaker demand would lead to job cuts in the coming months, sending its shares 7.4% lower.
American Airlines (NASDAQ:AAL) fell 6%, JetBlue Airways (NASDAQ:JBLU) fell 4.6%. and Delta Air Lines (NYSE:DAL) was down 5%. The Treasury Department also confirmed that several airlines including Delta, United, JetBlue, Southwest and Alaska Air (NYSE:ALK) had signed up to take government loans.
Financials, mostly banks, were also hit hard ahead of the quarterly earnings season, which starts in earnest next week.
JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Citigroup (NYSE:C) were down more than 2%.
Tech ran out of steam, with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) falling from session highs to end in the red.
Elsewhere, Walmart (NYSE:WMT) jumped 6.8% as the supermarket giant is reportedly set to begin a new membership service that rivals Amazon (NASDAQ:AMZN) Prime.
On the economic front, a record surge in hiring in May was downplayed amid growing the recovery in the labor market is limited.
The Labor Department said its JOLTS report showed that hiring in May rose by 2.4 million to 6.5 million, the largest monthly rise on record.