U.S. stocks fall sharply on fears of a weaker economy
Wall Street's main indexes fell sharply on Wednesday after data showing a cooling of U.S. business activity and the stalemate in Congress over more fiscal stimulus heightened concerns about the economy while the coronavirus pandemic remains unchecked.
The Nasdaq Composite Index fell by 3 percent to 10,632.99, the S&P 500 by 2.4 percent, to 3,236.92, and the Dow Jones Industrial Average by 2 percent to 26,763.13.
All of the 11 sectors under the S&P 500 suffered losses with energy, technology and materials sectors being hit hard.
The plunge came six months to the day that U.S. stocks on March 23 tumbled to their lowest point during a pandemic-induced selloff.
The economy is now leveling off at about 80 percent of activity before the pandemic and won't get back to normal until a vaccine is in place, Jason Pride, chief investment officer of private wealth at Glenmede in Philadelphia, told Reuters.
"We're at that phase where it's harder to get that next bit of the recovery, that next bit of the reopening in place," Pride said. "We're still doing it, but the progress is way slower than it was in the first three months of the reopening."
Fed Chairman Jerome Powell on Wednesday urged Congress to provide additional fiscal support for economic recovery. "Many borrowers will benefit from these programs, as will the overall economy," Powell said.
The U.S. Federal Reserve said last month that interest rates will remain unchanged at near-zero levels due to the pandemic disruptions.