Stocks slide as Wall Street braces for worst quarter in decades
US stocks slid Tuesday as the coronavirus pandemic put Wall Street on track to end its worst three-month period in decades.
The Dow Jones industrial average dropped as much as 191.02 points, or 0.8 percent, at the open after posting gains in four of the past five trading days. The blue-chip index was down 21.7 percent for the year through Monday, putting it on pace for its worst quarter since 1987 and its biggest first-quarter decline ever.
The S&P 500 index fell 0.8 percent in early trading and was down about 18.7 percent for the year as of Monday, indicating it will post its worst first quarter since 1938. The tech-focused Nasdaq was on track to finish its worst first quarter since 2008 as it dropped 0.6 percent after Tuesday’s opening bell.
Investors still face a rocky future given that the coronavirus has yet to peak in the US, where it has led to widespread business shutdowns and mass layoffs. But some experts say the worst of the selloff may be over as other countries start to overcome the disease and medical companies make progress toward a vaccine.
“The sentiment pendulum has swung between extremes over the past few months, placing investors on an emotional rollercoaster ride as monetary policy bazookas and handsome fiscal packages have struggled to lift global confidence,” FXTM senior research analyst Lukman Otunuga said.
Tuesday’s drop in stocks came as Goldman Sachs predicted the US economy would shrink by 34 percent on an annualized basis in the second quarter amid the coronavirus crisis. The bank also expects the unemployment rate to skyrocket to 15 percent by the middle of the year, up from 3.5 percent in February, according to Bloomberg.
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