The Dow Rollercoaster: Point Gains and Loses

After the US Congress resolved to use an emergency spending bill to help fight the coronavirus in the US on Wednesday, stocks surged. The Dow Jones Industrial Average gained over 1,150 points, the S&P 500 gained 1,173 points for the second time in three days, and Equities were boosted as a result of Biden’s Super Tuesday victory. 

Wednesday’s summary of the major indexes

·       Dow Jones Industrial Average: 27,090.86 up 4.5%

·       Nasdaq Composite: 9,018.09, up 3.9%

·      S&P 500: 3,130.11, up 4.2%

In only the previous day, the Dow Jones Industrial Average plunged about 800 points following the Federal reserve emergency rate cut as there were fears that the rate cut wasn’t going to be enough to fight the coronavirus economic impact. Another possible reason that built up to the fall of the Dow on Tuesday is the fact that the stock market suffered its worst week yet since the 2008 financial crisis.

In the early hours of Thursday, the Dow was once again set to drop 600 points, or 1.7% amid the coronavirus outbreak. This prediction followed after the Dow (INDU) futures fell Thursday morning. The S&P 500 (SPX) was fixed to open 1.9% lower while the Nasdaq Composite (COMP) opened down 1.8%.

The week has indeed been a rollercoaster for the Dow after it gained high points on Monday and Wednesday two of its best days in history, yet experienced one of its worst point losses on Tuesday. In spite of the two-days celebrated victory this week, the stock market still remains in correction.

Important Economic Factors to Consider Amid the Coronavirus Outbreak

In all hope, the global economy anticipates the end of the coronavirus because the more it spreads and thrives the more impact it has on the economy. It is almost certain that the first quarter reports of many companies would reflect the coronavirus impact. Industries like travel and leisure are reporting a decline in business as the outbreak thrives. This only means that the number of passengers will reduce as people are careful about their movements, even worse for airlines in California (California has declared a state of emergency until further notice). Traditional retail stores are not left out as the customer base is gradually declining. Supply chains are also affected as manufacturers cannot ship out parts and products overseas for fear of further spreading the virus. All these issues build-up to the fact that global economic growth may be sabotaged in this first quarter.