The start of the second quarter for all three major Wall Street indices Wednesday was a demoralizing continuation of the first, which saw both the Dow Jones Industrial Average and the benchmark S&P 500 post their worst first-quarter performances in their histories.
It was again COVID-19, especially news the economic hit from it will linger into late 2020, that drove Wall Street deep into the red. The U.S. economy remains largely shut down.
Boston Federal Reserve President Eric Rosengren called COVID-19 a "Black Swan" event that will trigger two-quarters of negative GDP growth. Adding to investor gloom were projections of a 10% unemployment rate for several months. The current unemployment rate stands at 3.5%.
The blue-chip Dow closed Wednesday 973.65 points lower, or 4.44%, at 20,943.51. The S&P 500 yielded 4.41% to 2,470.50 while the NASDAQ Composite closed at 7,360.58, or 4.41% lower. All major averages sank to their session lows in the final minutes of trading, and the Dow plunged more than 1,100 points at one point before rallying.
The Boeing Company dropped 12.4%, American Express shed 9.1% and Dow Inc lost 7.5% to lead the Dow lower. Real estate investment, utilities, energy, and financials led the S&P 500 in its downward march with each of those sectors down 5%.
Wednesday's selloff confirmed the negative numbers posted by futures late Tuesday. As of 9:45 p.m. ET Tuesday, Dow futures fell more than 260 points, or 1.2%. S&P 500 and NASDAQ-100 futures were down around 1%.
After markets closed Tuesday, President Donald Trump warned of a "very, very painful two weeks" ahead. The White House estimates anywhere from100,000 and 240,000 deaths from the COVID-19 pandemic by August.
"This could be a hell of a bad two weeks," said Trump. "This is going to be very bad two, and maybe three weeks. This is going to be three weeks like we've never seen before."
On Tuesday, the Dow closed 410.32 points lower, or 1.8%, at 21,917.16. The S&P 500 dropped 1.6% to 2,584.59 after gaining 152 points earlier in the day. The NASDAQ fell nearly 1% to 7,700.10.
"There's still tremendous uncertainty," said Patrick Kaser, portfolio manager at Brandywine Global. "We can look at history as a guidepost for the market and the economy, but there's not a perfect scenario."
"In situations like this, the best thing for long-term investors is to figure out what they want longer-term," he said.
