Traders work during the opening bell at the New York Stock Exchange (NYSE) on March 16, 2020 at Wall Street in New York City.
Johannes Eisele | AFP | Getty Images
U.S. stock futures pointed to losses at the open on Friday, which would erase the modest gains stocks managed to eke out during Thursday’s trading session.
Dow Jones Industrial Average futures fell 367 points, indicating a loss of 429 points, or 2.2%, on Friday. The S&P 500 and Nasdaq were slated to drop 2.3% and 1.6% respectively at the open.
Stocks rose on Thursday, with the Dow rising 188.27 points, or nearly 1%, to 20,087.19. The S&P 500 was up 0.5% at 2,409.39 while the Nasdaq Composite outperformed with a 2.3% surge to 7,150.58. The energy sector led stocks higher, gaining 6.75%, as oil posted its largest one-day percent gain in history.
Tech names also outperformed, with Netflix and Facebook rising 5.3% and 4.2%, respectively, while Amazon gained 2.8%.
Thursday’s relatively muted move was a break from the extreme volatility of late in the market, as investors try to make sense of the ongoing coronavirus-induced business slowdown.
On Wednesday, the Dow dropped 1,338.46 points, or 6.3%, to close below 20,000 for the first time since February 2017.
Still, Thursday’s gains have barely put a dent in what’s been a week of steep losses. The Dow is down 13.36% on the week, putting it on track for its largest weekly percentage loss since the financial crisis. The 30-stock index remains 32% below its all-time high level from February, while the S&P 500 is 29% below its high.
The Fed has announced a number of stimulus measures, but it hasn’t assuaged investors’ fears.
“Market volatility will persist until the government – fiscal or monetary – provides a backstop to stressed corporates and small & medium businesses,” New York Life Investments’ Lauren Goodwin said Thursday. “Support of those functions is vital to ensuring the economic disruption of covid-19, though severe, is temporary,” she added.
As the number of coronavirus cases continues to rise, Bridgewater’s Ray Dalio was the latest investor to weigh in on the long-term impacts of the virus.
“What’s happening has not happened in our lifetime before … What we have is a crisis,” the Bridgewater founder said Thursday on CNBC’s “Squawk Box.” “There will also be individuals who have very big losses. … There’s a need for the government to spend more money, a lot more money.”
He said the outbreak will cost U.S. corporations up to $4 trillion, and “a lot of people are going to be broke.”
– CNBC’s Yun Li contributed reporting.
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