Dow tumbles 730 points as COVID-19 cases rebound in several states

Stocks closed sharply lower on Wall Street on Friday as the number of confirmed new coronavirus cases in the United States hit an all-time high, stoking worries that the reopening of businesses investors have been banking on to revive the economy will be derailed.

The Dow Jones industrial average dropped 730 points, or 2.5%, to 25,015. The Nasdaq, which hit an all-time high earlier this week, slid 2.6%, to 9,757.

Despite falling 2.4%, to 3,009, the S&P 500 is still on pace for its best quarter since the fourth quarter of 1998.

All three indexes were on track for weekly losses. The S&P was off 2.7%, the Dow 3.3% and Nasdaq more than 1% lower for the week as the trading session headed into its final minutes.

All 11 sectors of the S&P were in the red, led downward by financials, energy and communication services. Shares of social media favorite Facebook plunged by more than 8% on news that packaged goods giant Unilever would suspend advertising on the site, Instagram and Twitter through the end of 2020 due to the “polarized atmosphere” on social media platforms.

The Nasdaq technology powerhouses, Apple, Alphabet, Microsoft, Netflix and Amazon.com, were all down sharply.

Goldman Sachs was the biggest drag on the Dow, its shares sliding 8%, after the Federal Reserve said it will cap dividends and restrict stock buybacks of the big banks as part of a “stress test” and analysis of the impact of COVID-19.

“While I expect banks will continue to manage their capital actions and liquidity risk prudently, and in support of the real economy, there is material uncertainty about the trajectory for the economic recovery,” Fed Vice Chair Randall Quarles said in a statement.

Dow component Nike, the sportswear and shoe giant, saw shares tumble 7% after it reported a surprisingly big earnings loss. Some analysts believe Nike’s poor showing could be a preview of next month’s corporate earnings season as companies announce the financial effects of the coronavirus lockdown.

Microsoft announced Friday that it would close all of its retail stores, adding another surprise to the day.

“June’s stock markets have been dominated by the coronavirus,” said Howard Silverblatt of S&P Dow Jones Indices. “July will be the earnings story. And August will be the election season. Call a chiropractor, and hold on. It will be whiplash time.”

Friday’s sell-off came after Texas Gov. Greg Abbott (R) issued an executive order reviving restrictions on bars, restaurants and certain types of outdoor recreation. The move comes a day after the state announced a pause in its reopening plans but said it would not revert to stricter measures in response to a surge in COVID-19 infections and hospitalizations.

Florida reported 8,942 new covid-19 cases Friday, blowing past its previous single-day record of 5,511 set Wednesday. Meanwhile, the Phoenix area is recording as many as 2,000 cases a day, prompting disease trackers to say, “Arizona has lost control of the epidemic.” South Carolina, Idaho and Guam also have reported big spikes in the past week.

Nationwide, more than 122,000 Americans have died of COVID-19. And the 2.4 million confirmed cases is a severe undercount; the head of the U.S. Centers for Disease Control and Prevention estimated Thursday that more than 24 million Americans have been infected so far.