US stocks turn negative as continued virus fears erase rally
- US stocks fell on Friday, erasing earlier gains and extending losses after their worst single-day sell-off since March.
- Thursday's slide was driven by fears that a second wave of coronavirus cases could devastate the US economy.
- Stocks tied to an economic reopening — including airlines, cruise operators, and retailers — gained early Friday after leading declines on Thursday. They later pared those gains.
- Read more on Business Insider.
US stocks fell on Friday, reversing earlier gains and extending losses from Thursday's sharp sell-off, which saw the worst the biggest single-day drop since mid-March.
Thursday's slide was driven by fears that a second wave of coronavirus cases could devastate the US economy. It halted a recent equity rally fueled by investor confidence in reopening progress in the US.
Stocks tied to an economic reopening — including Carnival, United Airlines, and retailers such as Gap and Kohl's — rebounded early on Friday after leading declines on Thursday.
Later in the day, stocks gave up those gains and led the broader market lower as fears of a second wave of coronavirus cases persist.
Here's where US indexes stood at the 1:50 p.m. ET on Friday:
- S&P 500: 3,990.47, down .4%
- Dow Jones industrial average: 25,111.36, down .07% (16 points)
- Nasdaq composite: 9,428.31, down 0.65%
Shares of Hertz surged more than 50% on Friday after the bankrupt car-rental company said it wanted to take advantage of its stock's recent rally and sell as much as $1 billion worth of shares.
The extended losses come amid continued signs of a sluggish global economic recovery. On Friday, the International Monetary Fund said that the economy was recovering from the shock of the coronavirus pandemic slower than expected and that the crisis would leave significant scars.
The University of Michigan's consumer survey showed that consumer sentiment jumped the most since 2016 in June, fueled by positive rehiring efforts job gains. However, two-thirds of consumers expect unfavorable economic conditions in the year ahead, due to fears that a second wave of coronavirus cases and persistent high unemployment will damage consumer finances.
On Thursday, President Donald Trump again criticized the actions of the Federal Reserve, tweeting that the central bank "is wrong so often" and predicting that the US economy will have a strong second half of 2020. Fed Chair Jerome Powell earlier this week said the US had a long road ahead.
Treasury Secretary Steven Mnuchin said on Thursday that the US can't shut down its economy again, even as fears of a second wave of COVID-19 cases increase. He also said he was prepared to ask Congress for more money to boost the US economy if necessary.