Stock indexes tumble as investors sweat out coronavirus spike

Wall Street’s major indexes fell on Wednesday as investors weighed the risk to domestic economy from rising coronavirus cases and a worsening forecast of the damage from the pandemic.

Washington state made face masks mandatory in public places, while many other US states saw record cases, including Arizona and Texas, where restrictions meant to slow the spread of the disease were lifted early.

The top US infectious disease official Anthony Fauci has said the next two weeks could be critical in containing the outbreak.

The International Monetary Fund said the pandemic was causing wider and deeper damage to economic activity than first thought, and it slashed its forecast for a contraction in global output to 4.9 percent from 3 percent.

Advanced economies have been particularly hard hit, with US output now expected to shrink 8 percent, more than 2 percentage points worse than the April forecast.

“The rising number of coronavirus cases we’re continuing to see in the United States is a major concern despite the Trump administration’s previous refusal to lockdown the economy again,” said Craig Erlam, market analyst at OANDA in London. “There will be significant resistance to restrictions being reimposed, but the fear is that they are left with no other option.”

A slate of better-than-feared economic reports, easing lockdowns and massive stimulus measures have powered the Nasdaq to an all-time high and put the benchmark S&P 500 on track for its best quarterly performance since 1975.

The S&P 500 and Dow Jones Industrials are just about 7 percent and 11.5 percent from their respective February record closing highs.

At 11:25 a.m. ET, the Dow Jones Industrial Average was down 628.77 points, or 2.4 percent, at 25,527.33, the S&P 500 was down 74.49 points, or 2.38 percent, at 3,056.80, and the Nasdaq Composite was down 210.20 points, or 2.07%, at 9,921.17.

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