Dow Jumps 800 Points As Stocks Try To Rebound From The Worst Sell-Off Since March

TOPLINE

The stock market recovered slightly on Friday, attempting to recoup some of its losses from a day earlier when fears over a second wave of coronavirus cases led to the worst market drop since March.

KEY FACTS

Crucial quote

“Stocks were overdue for a pullback after rallying more than 40% off the March lows and pricing in what we believe is an overly optimistic economic outlook,” says Jeff Buchbinder, equity strategist for LPL Financial. “More COVID-19 spread in a few southern and western states and a gloomy outlook from the Fed provided the spark for some of the froth to come out.”

Chief critic

“We can’t shut down the economy again,” Treasury Secretary Steven Mnuchin told CNBC on Thursday. “I think we’ve learned that if you shut down the economy, you’re going to create more damage,” he warned.

Key background

While the market is set to recover some of its losses from the brutal sell-off on Thursday, all three major indexes are on track to finish the week lower. The S&P, Dow and Nasdaq are set to post their biggest weekly losses since March 20, when they all dropped at least 12% amid widespread economic shutdowns during the pandemic. Federal Reserve chairman Jerome Powell reiterated at his press conference on Wednesday that while “there is great uncertainty about the future,” the Central Bank is strongly committed to doing “whatever we can, for as long as it takes” to help support the economy. Before this week, stocks had continued to rally on optimism about reopening the economy: The S&P 500 on Monday turned positive for 2020, fully recouping its losses from the coronavirus selloff earlier this year. But the market is now taking a sizable hit amid rising concerns over a second wave of coronavirus cases. 

Further reading

Stock Market Rout: Here’s What Caused The Worst Sell-Off Since March (Forbes)

Dow Falls 1,800 Points Amid Fears Over A Second Wave Of Coronavirus Cases (Forbes)

Dow Falls 250 Points After Federal Reserve’s Grim Economic Outlook (Forbes)

Federal Reserve Will Keep Interest Rates Near Zero Until 2022 (Forbes)

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