The threat of a second wave of the coronavirus has spooked investors, causing the stock market to skid Thursday.
The Dow Jones Industrial Average slipped nearly 7% Thursday, putting it on track for its first three-day losing streak in a month. The S&P 500 dropped 4.7%.
The stock market plunge is in response to a recent resurgence in coronavirus cases in reopened states, such as Arizona and California.
Thursday’s rout marked the worst day since March when markets crashed as investors reacted to the exponential growth of coronavirus cases, a development that prompted President Trump to move to what he would describe as a war footing to counter the virus.
“The equity market correction today is tied to the increase in infections in several U.S. states,” said Craig Alexander, chief economist at Deloitte Canada. “This has stoked fears that the reopening may be delayed in some regions (such as New York State). This view is corroborated by looking at who were the biggest losers: banks, airlines, and energy producers.”
Treasury Secretary Steven Mnuchin said Thursday that cities and states should not be shut down again if there is a second wave of the coronavirus, citing the economic damages that would be involved.
Despite a surge in new COVID-19 cases, federal and state governments are unlikely to reinstate lockdowns or other economic restrictions in an effort to stop a renewed outbreak in its tracks. He said Thursday, “We can’t shut down the economy again.”
“You create more damage, not just economic damage. There are other areas — medical problems that get put on hold. The president made the right decision. I think we learned a lot,” Mnuchin said.
Mnuchin also said the White House is still considering whether a fourth economic stimulus package is necessary. He told reporters Thursday, “It’s something that we’re very seriously considering,” according to the Wall Street Journal. Government officials are weighing how much funding is needed, which depends on how quickly the economy bounces back in the third quarter.
It wasn’t until the March market crash that Trump began taking the threat of COVID-19 seriously. Before then, he downplayed the threat posed by the virus, suggesting it would be like the seasonal flu. That same month, he signed the first economic stimulus package, the CARES Act, into law.
While the outbreak in the Northeast has slowed, California, Arizona, and Southern states have seen an uptick in new cases. Los Angeles County, for instance, has reported an average of roughly 1,300 new cases daily. The county, home to about 10 million people, has reported nearly 69,000 cases.
Arizona has become a new viral hot spot, having seen record-breaking daily hospitalizations since the beginning of June. As of Thursday, the state has 31,200 cases and 1,127 known deaths, according to the state health department. The Tennessee Department of Health reported 28,340 cases Thursday, an increase of 471 cases since Wednesday.
The Small Business Administration, tasked with distributing $660 billion in taxpayer-funded loans to small businesses suffering due to the pandemic, will not disclose the names of recipients or the amounts they were given, the Washington Post reported. The SBA said in April that it intended to make loan data publicly available but backtracked Wednesday during a hearing before the Senate small-business committee.
“As it relates to the names and amounts of specific PPP loans, we believe that that’s proprietary information, and in many cases, for sole proprietors and small businesses, it is confidential information,” Secretary Mnuchin said.
A 20-year-old woman whose lungs were ravaged by COVID-19 underwent a successful double lung transplant, the first known lung transplant in the United States. The Northwestern Memorial Hospital in Chicago announced Thursday that the 10-hour procedure last week went well, which sends the signal to other thoracic surgeons that a successful transplant in the age of COVID-19 is possible.
“There were so many times, day and night, our team had to react quickly to help her oxygenation and support her other organs to make sure they were healthy enough to support a transplant if and when the opportunity came,” said Dr. Beth Malsin, a pulmonary and critical care specialist at the hospital.
“One of the most exciting times was when the first coronavirus test came back negative, and we had the first sign she may have cleared the virus to become eligible for a life-saving transplant,” Malsin added.
The World Health Organization’s Africa regional director Matshidiso Moeti said Thursday that the coronavirus outbreak has worsened, spreading beyond major cities to areas with even fewer supplies and tests. The continent has been least affected by the coronavirus pandemic, but the number of cases has risen to over 200,000 in 18 days.
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