Stocks fall worldwide despite more aid from central banks
Stocks are falling in early trading on Wall Street Thursday, but the losses are more subdued than the wild swings that have dominated recent weeks. At least for now.
The S&P 500 was down 1.9% shortly after trading began, following eight straight days where it swung up or down between 4.9% and 12%.
Markets have been so volatile because investors are weighing the increasing likelihood of a recession on one hand against huge, emergency efforts by global authorities to support the economy on the other. Markets got more of each on Thursday.
In Canada, the S&P/TSX composite index was down 340.00 points at 11,381.42, shortly after the open.
The Canadian dollar traded for 69.16 cents US compared with an average of 68.98 cents US on Wednesday.
The number of Americans filing for unemployment benefits surged by 70,000 last week, more than economists expected, in one of the first signs of layoffs sweeping across the country. Wide swaths of the economy are grinding closer to a standstill, from the travel industry to restaurants, as authorities ask Americans to stay home to slow the spread of the virus. Another weak manufacturing report, this time in the mid-Atlantic region, added to the worries.
But the Federal Reserve and European Central Bank both also announced their latest efforts to support financial markets and the economy. The Fed unveiled measures to support money-market funds and the borrowing of dollars as investors in markets worldwide rush to build up dollars and cash. The European Central Bank, meanwhile, launched an expanded program to buy up to 750 billion euros ($820 billion) in bonds to support the economy.
The Dow Jones Industrial Average fell 408 points, or 2.1%, to 19,508, and the Nasdaq was little changed as of 9:55 a.m. Eastern time.
European stocks rose early in their trading day, but the gains dissipated. Asian markets also dropped following the brutal 5.1% loss for U.S. stocks the prior day.