, Drop in consumer confidence sends US stocks lower again, Saubio Making Wealth

Drop in consumer confidence sends US stocks lower again

a woman in NY walks past a closed storeImage copyright Getty Images

Financial markets have reversed course after a three day rally, dropping sharply as consumer confidence plummets amid the coronavirus pandemic.

Wall Street’s main indexes were more than 3% down in morning trade, following European markets lower.

The fall came as the number of coronavirus cases in the US surpassed China.

University of Michigan data also showed US consumer confidence dropped to its lowest level in three years in March.

“The outlook for the national economy for the year ahead weakened dramatically in March, with the majority now expecting bad times financially in the entire country,” the survey director said in a statement.

More than 3 million Americans filed for unemployment benefits last week, a record high that follows widespread forced business, school and other closures as authorities try to limit the spread of the virus.

Concerns about the economic impact have prompted market gyrations and wiped trillions of dollars worth off of value off shares since February, but prices had recovered some ground this week as governments around the world moved forward with plans to blunt the economic impact of the pandemic.

The Dow and the S&P 500 on Thursday capped their biggest three-day gain since the Great Depression, as the US Congress appeared set to approve a more than $2tn (£1.7tn) plan, with aid for households and companies.

However, analysts have said they expect investors to remain on edge until the pandemic is under control.

The University of Michigan survey found consumer sentiment fell 11.9 points in March – the biggest one month drop since October 2008, at the height of the global financial crisis.

Wells Fargo analysts said the figures signalled another “body blow” to the economy.

“We are in the early stages of this crisis and are only now beginning to see its severity in the economic data,” they wrote in a report.

Cruise companies, including Norwegian and Carnival, were among the biggest losers on Friday. Boeing, which had seen share prices surge this week on expectations it will receive aid, also dropped more than 10%.

London’s FTSE 100 tumbled more than 6%, while main indexes in France and Germany also fell.

Earlier Asian markets had gained, with the Nikkei 225 up 3.8%.



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