Markets battled to hold onto Monday’s gains during the last day of the first quarter, but ended the day at a loss, as investors closed out a period of historic market volatility sparked by the coronavirus pandemic, and the worst quarterly performance in history.
The Dow Jones Industrial Average closed 410.32 points lower, or 1.8%, while the S&P 500 fell 1.6% to 2,584.59, and continues to fall in the overnight session. The Nasdaq Composite also lost almost 1% to 7,700.10. The Dow had climbed as much as 152 points earlier in the day before declining.
Stock index ETFs are also struggled at the quarter-end, with the SPDR S&P 500 ETF Trust (SPY) down 1.84%, the SPDR Dow Jones Industrial Average ETF (DIA) off 1.6%, and the Invesco QQQ Trust (QQQ) down 0.95% at the close.
The coronavirus, which now shows more than 848,000 cases globally and almost 42,000 deaths have battered the economy and stocks.
Last week’s jobless claims report showed that a whopping 3.3 million Americans filed for unemployment benefits, which was four times more than the record set in 1982 and twice Bloomberg’s consensus estimate.
The Dow and S&P 500 had their worst first-quarter performances ever, posting losses of 23.2 and 20%, respectively. The Dow also had its most heinous overall quarter since 1987 while the S&P 500 had its heftiest quarterly loss since the depth of the financial crisis.
In March alone, the Dow and S&P 500 fell 13.7% and 12.5%, respectively, in March, in their worst one-month declines since 2008. The S&P 500 and Dow also underwent history volatility, exhibiting moves of no less than 1% in 21 of the 22 trading days this month, with many days as wide as 3-6%.
While many investors were hoping for a V-bottom recovery, based on the bounce that began last week, analysts remain skeptical.
“Last week’s double-digit gain for markets was a welcome relief rally, though market bottoms are rarely as clean as this one has been,” said Mark Hackett, Nationwide’s chief of investment research. “Markets will need to reflect more traditional interactions before confidence in a bottom can be reached.”
Goldman Sachs said that the economy would undergo a historic plunge in the second quarter, but that the recovery would then be the fastest in history, while the number of coronavirus cases in New York has jumped by 14% overnight to more than 75,000, both of which could be agitating markets.
Although social distancing could be helping somewhat, most analysts are looking for a leveling or drop in coronavirus cases before any kind of meaningful recovery can occur, as shops, amusement parks, restaurants, bars, and more remain closed.
“It’s hard to envision the equity market trending higher without some visibility and the curve of new cases begins to flatten out,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “Perhaps we’ll get some of those characteristics as you look through the earnings season.”
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