U.S. stocks fall, snapping three-day winning streak

Andrew Cummings
March 29, 2020

The number of cases in the US has surpassed those in China and Italy, climbing to more than 104,000 known cases, according to Johns Hopkins University.

The early Friday selloff came after the Dow soared nearly 4,000 points in the prior three trading days - its biggest three-day jump since 1931. By the end of the session, the Dow was off more than 4%, while each of the S&P 500 and Nasdaq shed more than 3%.

Howard Silverblatt, senior index analyst at S&P Dow Jones Indices in NY, said he still sees the Dow in a bear market.

Delta Airlines, American Airlines and United Airlines fell between 6 per cent and 11 per cent as US Treasury Secretary Steve Mnuchin said the help designated for airlines in the aid package was not a bailout and that taxpayers would need to be compensated.

Crude oil prices dropped, and that drove down shares of oil giants Exxon Mobil and Chevron.

Airlines, hotels and cruise operators, among the hardest hit US sectors, were some of the strongest gainers in premarket trading. The Dow rose 12.8% week to date, its biggest one-week gain since 1938.

The S&P 500 rose 236.55 points, or 10.3%.

The Dow rallied more than 6% Thursday to post its biggest three-day gain since 1931. Many investors expect the recent market volatility to persist.

"Next week will depend on what happens over the weekend", said Lindsey Bell, Chief Investment Strategist at Ally Invest. "Two other uncertainties facing investors (the length of the economic quarantine required to contain the virus and the ultimate economic damage) remain unresolved".

After the White House and Senators agreed on a deal to aid businesses and millions of Americans hit by the health crisis, futures briefly surged but soon reversed course as traders said much of the stimulus had been priced into financial markets. The bear runs that began in 2000 and 2007 both had head fakes of more than 20% before ending, Barclays data shows.

Analysts warn against putting too much stock in strict definitions of market cycles.

Despite the market's weekly gains, the major averages were still more than 20% below the record highs set last month.

Investors have been on a roller-coaster ride as attempts to curb the coronavirus pandemic constrain economic activity and policy makers work to cushion the blow. This week the USA passed China as the country with the most virus cases and the numbers continue to accelerate. Meanwhile, UK Prime Minister Boris Johnson has tested positive for the coronavirus.

Major U.S. stock indexes fell more than 3% on Wall Street Friday, giving back part of the gains they piled up over the past three days.

The outbreak has also led several businesses to close shop, sparking a massive surge in unemployment claims.

"This is going to be an economic fallout". That follows two weeks of relentless selling.

CNBC's Yun Li contributed reporting.

Investors poured $259.8 billion into money market funds, a third consecutive week of record inflows, according to Refinitiv Lipper.

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