NEW YORK — The Dow Jones Industrial Average dropped 943 points Wednesday as surging coronavirus cases in the U.S. and Europe threaten more business shutdowns and pain for the economy.
The S&P 500 dropped 3.5%, its third straight loss. The index has now given up 5.6% so far this week and is on track for its biggest weekly fall since March, when markets were in a downward spiral.
European markets also sank. Crude oil prices fell sharply as investors anticipated that demand for energy will weaken along with the economy. Treasury yields fell as investors sought shelter in safer assets.
Markets dropped in Europe, where investors expect the French president to announce tough measures to slow the virus' spread and German officials agreed to impose a four-week partial lockdown. The measures may not be as stringent as the shutdown orders that swept the world early this year, but the worry is they could still hit the already-weakened global economy.
Policymakers in Europe “must choose between low unemployment or low COVID transmission rates. Unfortunately, they are now left dealing with the most sensitive currency of them all, people’s lives,” Stephen Innes of Axi said in a report.
In European stock markets, Germany’s DAX lost 4.2%, and France’s CAC 40 dropped 3.4%. The FTSE 100 in London fell 2.6%.
Coronavirus counts are also climbing at a troubling rate in much of the United States, and the number of deaths and hospitalizations due to COVID-19 are on the rise. Even if the most restrictive lockdowns don’t return, investors worry that the worsening pandemic could scare away customers of businesses regardless and sap away their profits.
Stocks of companies that most need the virus to abate for their businesses to get back to normal were slumping to some of the sharpest losses. Cruise operators Carnival and Norwegian Cruise Line Holdings fell at least 8%, while Royal Caribbean fell 5.2%. Delta Air Lines lost 4.9%. Live Nation Entertainment, which depends on customers going to concerts and other events, sank 4%.
Crude oil also tumbled on worries that an economy already weakened by the virus would consume even less energy and allow excess supplies to build higher. Benchmark U.S. crude dropped 6.2% to $37.09 per barrel. Brent crude, the international standard, fell 5.4% to $39.34 per barrel.
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