Live

Watch CBSN Live

Stocks tumble as Wall Street spooked by statewide shutdowns

N.Y. shuts down "non-essential" businesses

Stocks slumped on Wall Street as investors weighed the impact of more shutdowns, including New York Governor Andrew Cuomo's order to keep most of the workforce in the state at home. It marks the end of another turbulent week that witnessed punishing drops as investors weighed the economic impact of the widening coronavirus pandemic.

The Dow shed 913 points, or 4.6%, to 19,174. The broad-based S&P 500-stock index slipped 4.3% and the tech-heavy Nasdaq composite declined 3.8%. 

Investors are digesting increasingly dire predictions for the economic impact of the widening coronavirus pandemic. New York's Cuomo on Friday banned all non-essential gatherings in the state and ordered workers to stay at home indefinitely in a move to help contain the coronavirus. On Thursday, California Governor Gavin Newsom announced a statewide order for residents to stay at home, shuttering venues like bars, dine-in restaurants and gyms. 

"The pandemic will cost the economy $1.5 trillion ... in foregone GDP," noted IHS Markit in an estimate of the economic impact. 

All of California ordered to shelter in place over coronavirus

Second-quarter GDP could slump 13% in the second quarter, while unemployment could rise to 9% by year-end, the group said in its forecast. And most anything could change at most any moment, it cautioned: "Of course the uncertainty surrounding these projections is immense. With events changing rapidly, this forecast update could well be out of date by the time this note is read."

Wanted: "A boatload of stimulus"

While the economic impact is still uncertain, investors are also looking for "a boatload of stimulus by both central banks and governments [that] will put the global economy in position for a U-shaped recovery," said Edward Moya of Oanda in a report.

"The Fed made aggressive moves this past week including: cutting its policy rate by 100 [basis points] to the zero lower bound, announcing $700 [billion] of [quantitative easing] and activating several emergency facilities to support liquidity [in money markets and bond markets]," wrote Bank of America analysts on Friday. "The recovery is likely to begin in [the second half of 2020] but the speed and magnitude will depend on the policy response."

U.S. unemployment claims skyrocket as the government works to relieve financial burden

Wall Street has bounced up and down by record-setting margins of up to 12% daily over the past week. Unease has grown as forecasters say a global recession looks increasingly likely and have cut growth outlooks for the United States, China and other major economies.

Central banks across the globe are trying to reduce the impact of a global recession that forecasters say looks increasingly likely as the United States and other governments tighten travel controls, close businesses and tell consumers and travelers to stay home.

Investors also appeared to be encouraged by reports that China is set to ramp up stimulus spending after the province where the virus is believed to have emerged in December reported no new infections on Wednesday.

The U.S. Federal Reserve unveiled measures Thursday to support money-market funds and the borrowing of dollars as investors in markets worldwide hurry to build up dollars and cash as insurance against falling asset prices.

That rush to gather dollars is straining markets, with sellers of even high-quality bonds struggling to find buyers at reasonable prices.

View CBS News In
CBS News App Open
Chrome browser logo Chrome Safari browser logo Safari Continue