Wall Street’s major averages pulled back considerably in the week as investors worried that soaring COVID-19 infections could slow down economic recovery.
For the week ending Friday, the Dow fell 6.5 per cent, the S&P 500 5.6 per cent and the Nasdaq 5.5 per cent. The major averages had their worst one-week performance since March, Xinhua news agency reported on Saturday.
The S&P US Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on US exchanges by total market cap, logged a weekly rise of 0.06 per cent.
The moves came as the pandemic rages on and some European countries began to implement new restrictions.
“COVID-19 cases and hospitalizations are surging across the United States and Europe. The stock market appears to be taking note,” analysts at Zacks Investment Management, said in a note Saturday.
The daily new cases have regularly surpassed 80,000 recently in the United States. The country has reported more than 9.1 million in total infections with the death toll surpassing 230,000 as of Saturday afternoon, showed a tally by Johns Hopkins University.
“The threat of another economic lockdown is low, but cities with spiralling hospitalization rates may need to pursue more targeted restrictions and closures. The stock market is likely to respond adversely to any planned economic restrictions,” Zacks analysts added.
In addition to surging COVID-19 cases, investors were keeping a watchful eye on the upcoming election and what the results could mean for the markets.
“Elections have consequences, but the defeat of the pandemic and subsequent economic recovery will continue to be one of the main market drivers in any election outcome,” said analysts at UBS.
On the data front, US economic activity in the third quarter grew at an annual rate of 33.1 per cent after a sharp contraction in the previous quarter, the US Commerce Department reported Thursday. The reading exceeded the 32 per cent estimate from economists surveyed by Dow Jones.The rebound came after the economy plunged at a revised annual rate of 31.4 per cent in the second quarter amid mounting COVID-19 fallout, which has been the largest decline since the US government began keeping records in 1947.