Wall Street tumbles as US coronavirus cases pass 85,000; Dow falls 4%

Wall Street stocks tumbled on Friday, ending a massive three-day surge after doubts about the fate of the US economy resurfaced and the number of coronavirus cases in the country climbed.

US stocks deepened their losses late in the session, even after the House of Representatives approved a $2.2 trillion aid package - the largest in American history - to help people and companies cope with an economic downturn caused by the coronavirus outbreak and provide hospitals with urgently needed medical supplies.

The United States has surpassed China and Italy as the country with the most coronavirus cases. The number of US cases passed 85,000, and the death toll exceeded 1,200.

"We have still not fully understood the degree of the economic impact," warned Massud Ghaussy, senior analyst at Nasdaq IR Intelligence in New York.

"Currently, from a policymaker's perspective, it's a relative balance between managing the spread of the virus and opening the economy."

After the market closed, President Donald Trump signed the stimulus package into law.

The bill, along with unprecedented policy easing by the Federal Reserve, helped the S&P 500 surge 10.2% for the week, its best week since 2009. But the U.

S. stock market benchmark is still down about 25% from its February high.

In its strongest three-day performance since 1931, the Dow surged 21% in three straight days through Thursday, establishing it in a bull market, according to one widely used definition.

Even after Friday's drop, the Dow ended 12.8% higher, its best week since 1938.

Many investors see a strong risk the market could fall deeply again as coronavirus infections increase and more people die, however.

"Next week will depend on what happens over the weekend," said Lindsey Bell, chief investment strategist at Ally Invest.

"If there is a major acceleration over the weekend of coronavirus cases in New York and other states and the hospital system continues to get jammed up, then I think it will be a rough week for the market."

Macroeconomic indicators offered a glimpse of the economic devastation from the crisis as the lockdown of major cities upends the lives of millions of Americans.

U. S. consumer sentiment dropped to a near 3-1/2-year low in March, according to a survey released on Friday, a day after data showed a record 3 million surge in jobless claims last week.

The Dow Jones Industrial Average slumped 4.06% to end at 21,636.78 points, while the S&P 500 lost 3.37% to 2,541.47.

The Nasdaq Composite dropped 3.79% to 7,502.38.

Volume on US exchanges was 13.4 billion shares, its lowest since March 5, according to Refinitiv data.

Delta Airlines, American Airlines and United Airlines fell between 6% and 11% as U. S. Treasury Secretary Steve Mnuchin said the help designated for airlines in the aid package was not a bailout and that taxpayers would need to be compensated.

Boeing Co slumped 10%, but was still up more than 70% for the week, after Mnuchin said the planemaker had no intention of using federal money.

The banking index fell 4.6%, tracking US Treasury yields as investors sought safety in high-quality assets.

The energy index was the biggest percentage loser among the 11 major S&P sectors, sliding 6.9%, following a drop in oil prices.

Declining issues outnumbered advancing ones on the NYSE by a 3.17-to-1 ratio; on Nasdaq, a 2.98-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and one new low; the Nasdaq Composite recorded nine new highs and 39 new lows.

Wall Street muted on doubts over progress in US-China trade deal

The S&P 500 and Dow indexes treaded water on Thursday as mixed headlines on US-China relations and a diplomatic row over the Hong Kong protests added to uncertainty over the timing of a "phase one" trade deal.

The US House of Representatives passed two bills to back protesters in Hong Kong and send a warning to China about human rights, a measure which angered Beijing.

But China has invited top US trade negotiators for a new round of face-to-face talks in Beijing, the Wall Street Journal reported on Thursday, citing unnamed sources, adding Beijing hopes the round of talks can take place before next Thursday's Thanksgiving holiday in the United States.

This was the day after stocks sold off on a report that a Phase 1 US-China trade deal was not likely to happen this year. As a result investors were sticking to the sidelines for fear of missing out if relations were to improve, but keeping in mind that Wall Street's indexes were still near record highs.

"The fulcrum of this optimism see-saw is the prospects for the phase 1 trade agreement. Investors are pulling petals from a daisy saying, 'it'll happen this year, it won't,'" said Sam Stovall, chief investment strategist at CFRA Research in New York.

"They are basically saying we've pushed this as far as we can. Valuations appear stretched at 18.5 times forward earnings compared with the 20-year average forward P/E Of 16.5," he said.

At 2:47 p.m. ET, the Dow Jones Industrial Average fell 6.89 points, or 0.02%, to 27,814.2, the S&P 500 lost 0.61 points, or 0.02%, to 3,107.85 and the Nasdaq Composite dropped 8.62 points, or 0.1%, to 8,518.11.

Six out of the S&P 500's 11 major industry sectors rose on the day with energy showing the biggest gain at 1.4% as oil prices rose on hopes that the OPEC and its allies were likely to extend output cuts until mid-2020..

Real estate showed the biggest decline at 1% and technology was the biggest drag on the benchmark index.

Shares in TD Ameritrade Holding Corp surged 18% after CNBC reported bigger rival Charles Schwab Corp was in talks to buy the discount brokerage. Schwab's shares gained 6.8%.

Tiffany & Co gained about 2.3% after a Reuters report that LVMH persuaded the jewellery chain to allow it to access its books following a raised bid.

Economic data was mixed on Thursday. The number of Americans filing applications for unemployment benefits was unexpectedly unchanged at a five-month high last week, suggesting some softening in the labour market.

But U.S. home sales increased more than expected in October and house prices rose at the fastest pace in more than two years amid lower mortgage rates and a shortage of properties for sale.

Declining issues outnumbered advancing ones on the NYSE by a 1.44-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favoured decliners.

The S&P 500 posted 11 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 46 new highs and 82 new lows.