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Dow Notches Weekly Loss as Reopenings Suffer Reckoning

By Yasin Ebrahim

Investing.com - Wall Street rounded off a losing week with steep losses on Friday, after some states reinforced fresh restrictions to curb coronavirus outbreaks that have pushed daily infections in the U.S. to record highs.,     

The Dow Jones Industrial Average fell 2.84%, or 730 points, the S&P 500 lost 2.40%, while the Nasdaq Composite slumped 2.69%.

A sea of red washed over stocks on Friday as investor hopes of quicker economic recovery were dealt a blow after parts of the U.S. scaled back reopening efforts.

  California Governor Gavin Newsom said he recommended that Imperial County, which is near the Mexican border, reinstate its stay-at-home order. In Texas, meanwhile, Governor Greg Abbott called a temporary halt to its reopening on Friday, shutting bars back down and scaling back restaurant capacity to 50%.

That drastic move followed similar measures to combat the outbreak in Florida after the state suspended the consumption of alcohol on the premises at bars statewide. 

Other states, including Alabama, Idaho, Mississippi, Missouri, Nevada, Oklahoma, South Carolina, and Wyoming, have reported a record daily increases in infections this week, taking the tally of new cases nationwide to 40,000  on Thursday, the highest one-day rise since the pandemic began.

Stocks tied to the progress of the economic reopening, including energy, industrials, and financials were among the worst hit, with latter coming under added pressure amid slump in bank stocks.

The Federal Reserve voted to prevent banks from buying back stock and limit their dividend payments in the third quarter, after stress tests – design to test the liquidity of banks under extreme adverse economic events – flagged concerns that "several banks would approach minimum capital levels" under a worse case pandemic scenario.

JPMorgan Chase (NYSE:JPM) fell 5.4%, Bank of America (NYSE:BAC) dropped 6.3%, while Goldman (NYSE:GS) plunged 8.7%.

Travel and tourism stocks, sensitive to the pace of economic recovery, tumbled. United Airlines Holdings Inc (NASDAQ:UAL) was down 5.2%, Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) was down 5%, Wynn Resorts Limited (NASDAQ:WYNN) fell 6% and Marriott International Inc (NASDAQ:MAR) fell 3.7%. 

Tech was roiled by a slump in shares of Facebook (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) on fears about softer advertising revenue after Unilever (NYSE:UL) said it would be pausing brand advertising on Facebook, Instagram and Twitter in the U.S. through at least the year end.

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