Virus Cases Send Wall Street Plunging

Wall Street's three major indexes on Wednesday suffered their biggest daily percentage drop in almost two weeks as a surge in US coronavirus cases intensified fears of another round of government lockdowns and worsening economic damage.

Nasdaq, which had registered its fifth record closing high on Tuesday, snapped an eight-day wining streak, which was its longest since December 2019.

The session marked the biggest percentage decline for all three indexes, including a 2.6 percent drop for the S&P 500, since June 11 when the S&P fell 5.89 percent.

The United States has recorded the second-largest rise in infections since the health crisis began, with a flare-up of cases in states where restrictions meant to contain the disease were lifted early.

The governors of New York, New Jersey and Connecticut announced that visitors from states with high coronavirus infection rates must self-quarantine for 14 days on arrival.

"Today was finally the day markets came to terms with the fact that increasing Covid-19 cases could mean a slower recovery in the economy," said Art Hogan, chief market strategist at National Securities in New York.

The pandemic appeared to be causing wider and deeper damage to economic activity than first thought. The IMF said it now expects global output to shrink by 4.9 percent, compared with a 3.0 percent contraction predicted in April.

Advanced economies have been particularly hard hit, with US output now expected to shrink 8.0 percent, more than two percentage points worse than the April forecast.

The Dow Jones Industrial Average fell 2.72 percent, to 25,446, the S&P 500 lost 2.59 percent, to 3,050 and the Nasdaq Composite dropped 2.19 percent, to 9,909.

Before Wednesday's sell-off, a slate of better-than-feared economic reports, easing lockdowns and massive stimulus measures had powered the Nasdaq to an all-time high and put the benchmark S&P 500 on track for its best quarterly performance since 1998. (Reuters)