Dow Falls 974 Points, the Worst First Day of a Quarter Ever

The second quarter is off to a weak start, with losses in Europe led by banks and U.S. stocks under pressure after health officials there released a grim projection of potential deaths in that country from the coronavirus outbreak.

All three major U.S. stock indexes opened the second quarter with steep losses, each tumbling more than 4% amid more dismal news on the coronavirus outbreak.

U.S. stocks tumbled into the close on Wednesday, to open the second quarter with a steep loss. Coronavirus concerns remained front and center, after U.S. health officials warned on Tuesday night that Americans should expect up to 240,000 deaths in the country.

The Dow Jones Industrial Average closed down 974 points, or 4.4%, a day after the index finished its worst first-quarter performance on record. The S&P 500 and Nasdaq Composite both fell 4.4% as well. Each index ended at its lows of the day, and the Dow and S&P 500 had worst first days of a quarter ever.

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Investors began the new quarter with dismal news on the coronavirus outbreak. President Donald Trump on Tuesday warned of a “rough two-week period” as the White House projected 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic, even amid current social-distancing guidelines.

Dr. Anthony Fauci, the government’s top infectious-disease expert, called on Americans to “step on the accelerator” with those efforts, and said the U.S. can do better than those dire predictions.

The pandemic has killed more than 4,000 in the U.S. and infected 189,633, according to data aggregated by the Center for Systems Science and Engineering at Johns Hopkins University. New York has been particularly hard hit by the virus, with over 1,000 deaths. The world-wide total of cases rose to 862,234 on Wednesday.

Michael Hewson, chief market analyst at CMC Markets U.K., said it’s still “remarkably premature” to talk of a bottom for stock markets, given rising infection and death rates across Europe and the U.S.

”Investors and market participants more broadly need to come to terms with the reality that the world as we know it is unlikely to be the same as the world we saw at the end of 2019,” Hewson told clients in a note. “That, more than anything, makes it much more difficult to predict what a fair valuation is likely to be as we look toward the next decade.”

The Stoxx Europe 600 lost 2.9% Wednesday, with the German DAX and the French CAC 40 closing down 3.9% and 4.3%, respectively. The FTSE 100 index dropped 3.8%.

Banks weighed down the main European index, with those in the U.K. leading the way south after announcing they would halt 2020 dividends at the request of the Bank of England. Among those, Barclays fell 10.6% and HSBC Holdings tumbled 10.3%.

Japan’s Nikkei 225 index closed down 4.5%, while Hong Kong’s Hang Seng index fell 2.2%.

U.S. stock trading remains dominated by how the outbreak is affecting various companies and industries, and by health-care companies’ efforts to find solutions.

Travel stocks were hit again on the dour Covid-19 news. Royal Caribbean Cruises (ticker: RCL) shares ended down 19.9%. Carnival (CCL) shares fell 33.2%.

American Airlines (AAL) stock dropped 12.3% following news that the company plans to take $12 billion in government aid. Other airlines are evaluating their options.

The first quarter also included an oil-price shock after the Saudis and Russians ramped up output, even as demand shrinks, in a fight for market share. Oil prices dropped by almost two-thirds in the first quarter. Prices rose slightly on Wednesday, with the U.S. benchmark closing up 1.5%, at $20.79 per barrel. Shares of oil producers fell nonetheless: Occidental Petroleum (OXY) stock, for instance, dropped 7.2%. Chevron (CVX) shares were off 5.4%.

Mallinckrodt (MNK) stock fell 2.5%, reversing large morning gains. The company announced a trial for nitric oxide therapy for lung complications associated with Covid-19. Mallinckrodt shares have been volatile in 2020, dropping about 43% year to date as of Tuesday’s closing price.

In non-coronavirus news, T-Mobile US (TMUS) closed its long-awaited acquisition of Sprint on Wednesday. It combines the third- and fourth-largest U.S. wireless carriers two years after a deal was first agreed. T-Mobile shares ended the day up 1.5%.

Write to Barbara Kollmeyer at and Al Root at

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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