New York (Reuters) - Wall Street’s three major indexes fell more than 4% on Wednesday, after President Donald Trump’s dire warning on the U.S. death toll from the coronavirus sent investors running from even the most defensive equities.
Trump warned Americans late Tuesday of a “painful” two weeks ahead and health officials highlighted research predictions of an enormous jump in virus-related deaths.
Economic data did little to lift the mood. While U.S. manufacturing activity contracted less than expected in March, new orders received to factories fell to an 11-year low. And business closures pushed private payrolls down by 27,000 jobs last month, the first decline since September 2017, according to the ADP National Employment Report.
But money managers mostly focused on Trump’s comments and those of New York Governor Andrew Cuomo, a state badly hit by the virus.
“With comments from President Trump and Cuomo suggesting this is going to get worse before it gets better, investors are coming to the realization the virus will be with us for longer than they would have expected,” said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, NC.
“Because of that the bear market is going to last longer,” he said. “The longer people stay home the longer it takes for the economy to restart and the longer it takes for corporate earnings to come back.”
The Dow Jones Industrial Average .DJI fell 973.65 points, or 4.44%, to 20,943.51, the S&P 500 .SPX lost 114.09 points, or 4.41%, to 2,470.5 and the Nasdaq Composite .IXIC dropped 339.52 points, or 4.41%, to 7,360.58.
Even sectors generally seen as the safer bets because of high dividends saw a stampede to the exits. Real estate .SPLRCR and utilities .SPLRCU each declined 6%,
