NEW YORK (dpa-AFX) – A gloomy economic assessment by the US Federal Reserve and the fear of a second corona wave have driven investors on Wall Street to flight. The US benchmark index Dow Jones Industrial collapsed on Thursday by 6.90 percent to 25,128.17 points and found itself again at the level of the end of May. This was the largest daily percentage loss on a closing price basis since March. In the meantime, the Dow has almost fallen below the 25,000 mark. For the market-wide S&P 500 it ended up down 5.89 percent to 3002.10 points.
Jerome Powell, the chairman of the Fed, had already found clear words in the middle of the week in view of the severe economic crisis as a result of the corona pandemic and said that a significant part of the job losses could be permanent. In addition, there were new numbers of infections in the Corona crisis on Thursday: In some southern states, including Florida and Texas, new infections rose again. “We expect the reintroduction of some corona restrictions in some cities or states in the coming weeks,” said the British analysis company Pantheon.
In this environment, many investors continued to cash in. The Dow only climbed to its highest level since the end of February with 27,580 points at the start of the week. That was an increase of more than 50 percent since the Corona crash low in March. No fewer stock exchange traders had already spoken of the market overheating because of the flood of cheap money from the central banks, which no longer had anything to do with the real economic prospects.
The tech value-heavy Nasdaq 100 had even risen to a record high and now fell by 5.01 percent to 9588.48 points. Powell’s remarks now seem to have brought investors back to reality a little bit./la/he
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