Friday Wall Street Rally Fizzles; Dow Closes 900 Points Lower
A Wall Street opening rally Friday crumbled at the end under the weight of COVID-19, with the Dow Jones Industrial Average yielding 913.21 points, or more than 4%, at 19,173.98 after rising by more than 400 points earlier in the day. The S&P 500 slid 4.3% to 2,304.92. The NASDAQ Composite ended the day 3.8% lower at 6,879.52 after recovering by more than 2%.
Shares of 3M and The Walt Disney Company dragged the Dow lower, the former losing 9.5% and the latter, 9.4%. The S&P 500's tech sector sank to close more than 4% lower as Microsoft fell 3.8% while Alphabet lost 3.9%. Qualcomm plummeted 6.3%.
Friday's failed finish amid unsettling volatility set the seal on a grim week, where Wall Street posted losses in four out of five sessions. The 30-stock Dow fell more than 17% for the week, its biggest one-week fall since October 2008 when it lost 18.2%. It's down more than 24% for March and is now on pace for its biggest one-month fall since September 1931.
The S&P 500 lost more than 13% week-to-date after dropping another 11.5% last week. It's plunged 22% month-to-date and is headed for its worst monthly performance since May 1940.
The NASDAQ fell 12.6% week-to-date. Both the S&P 500 and NASDAQ also had their worst weekly performances since the Great Recession in 2008.
The Dow is now 35.2% below its all-time high level from February, while the S&P 500 is 32.1% below its high. These disastrous outcomes only occurred in the last five weeks.
Analysts said fear-stricken investors fled on news Friday of New York State's 100% population lockdown, which includes non-essential businesses. The lockdown requires all non-essential government and private-sector employees to work from home.
Gov. Andrew Cuomo ordered New York to shut down and asked local businesses and manufactures to step-up as officials mount a desperate struggle to slow the the growing COVID-19 pandemic.
"I want to be able to say to the people of New York -- I did everything we could do," said Cuomo at the state Capitol in Albany. "And if everything we do saves just one life, I'll be happy."
The restrictions take effect Sunday night at 8 p.m. and will shut down all nonessential businesses across the state. Left open will be grocery stores, pharmacies and other essential operations.
New York City is now the country's epicenter for the COVID-19 pandemic. Its 5,151 confirmed cases of COVID-19 account for a third of all cases in the U.S.
The New York Stock Exchange in New York City will close its physical trading floor Monday and will switch to all-digital trading after an employee and a trader tested positive Thursday for COVID-19.
Also responsible for the renewed flight away from equities was a swift reversal in crude prices and a strengthening dollar. Oil gave back a strong earlier gain to settle sharply lower.
"The markets are trading more on emotion than the actual data," said Sal Bruno, chief investment officer at financial services provider, IndexIQ, based in New York City. "That's what's causing the volatility."
"We've seen assets just trade off, really for no good reason, but just because there's fear," he said. "When we look back at this, we'll see how much of this was information-based trading and how much was emotionally based trading."
The fear gripping the investor community was reflected in the CBOE Volatility Index (VIX), otherwise known as Wall Street's Fear Index, which closed above 80 earlier in the week, topping its peak during the Great Recession of 2008.
"The volatility, there's no reason to think it dissipates," said JJ Kinahan, chief market strategist at TD Ameritrade. "What you really want to see is the market establishing some trading ranges."
"Right now, I don't think anyone can say there's definite support or resistance because the moves have been just so big," he said.