Dow slips 175 points as investors weigh the continued spread of coronavirus

FILE PHOTO: Trader Peter Tuchman works at the New York Stock Exchange (NYSE) in New York, U.S., January 2, 2020. REUTERS/Bryan R Smith

  • US stocks slipped Tuesday as investors weighed a longer-than-expected recovery from the escalating coronavirus outbreak.
  • The losses came as major banks revised their second-quarter GDP projections lower, citing a record jump in unemployment claims and severe financial tightening.
  • The Dow Jones industrial average is on track for its worst first quarter in history, while the S&P 500 is poised to end the first quarter with its worst return since the financial crisis.
  • Global confirmed COVID-19 cases passed 800,000 Tuesday while the death toll climbed above 38,700. The US death count passed 3,000 after 500 people died in the last 24 hours.
  • Watch major indices update live here.

US stocks dipped Tuesday as traders weighed a longer-than-expected recovery from the escalating coronavirus outbreak.

The losses come as numerous economists across Wall Street further revise their quarterly gross domestic product estimates lower amid the spreading pandemic. Goldman Sachs sees the economy shrinking by 34% next quarter, eclipsing its previous 24% projection.Advertisement

Goldman added Tuesday that "sky-high" jobless claims hint at a "bigger output and (especially) labor market collapse than we had anticipated." JPMorgan lowered its estimate to a 25% GDP contraction on Thursday as the outbreak continues to tighten financial conditions across the country.

Here's where the major US indexes stood shortly after the market open at 9:30 a.m. ET Tuesday:

Read more: GOLDMAN SACHS: Buy these 15 high-yielding, cash-rich stocks as coronavirus uncertainty forces companies to slash dividend payments
Advertisement

Major US indexes are set to end the quarter having logged worst performance since the financial crisis. The Dow specifically is on pace for its biggest first-quarter decline on record, dragged lower by struggling giants Boeing and ExxonMobil.

Oil gained Tuesday morning closing the prior day at 18-year lows. Brent crude, oil's international benchmark, has seen unprecedented price pressure from coronavirus's hit to global demand. A price war between Saudi Arabia and Russia has further dragged prices lower as the two giants flood the market with unwanted inventory.Read more: 5 corporate-debt experts break down how the coronavirus crisis is ravaging cash-strapped firms - and share what they're buying to avoid risky 'zombie' companiesAdvertisement

Coronavirus's total infection count passed 800,000 on Tuesday as the global death toll passed 38,700. The US death toll climbed above 3,000 on Tuesday after 500 people died over the past 24 hours.

Monday's session marked the fourth gain for US equities in five trading days. The Dow closed nearly 700 points higher as investors weighed new measures to curb coronavirus contagion and discover a vaccine. Abbott Laboratories soared as much as 13% after receiving FDA approval for its quick COVID-19 test.

Read more: RBC says coronavirus-battered stocks could plunge another 28%. Here are the areas of the market they say will thrive when the dust clears.Advertisement

Investors also cheered signs that the White House would avoid prematurely opening the economy from its frozen state. President Trump announced Sunday that federal social-distancing mandates would be extended through April, reversing his previous call to resume regular economic activity by Easter.

Now read more markets coverage from Markets Insider and Business Insider:

Saudi Aramco needs cash with oil prices at a 17-year low - and now it may reportedly sell a piece of its pipeline unitAdvertisement

Economists forecast a record 3.5 million more people filed for unemployment last week amid the coronavirus shutdown

GOLDMAN SACHS: Buy these 15 high-yielding, cash-rich stocks as coronavirus uncertainty forces companies to slash dividend payments

BI BankingAdvertisement

{{}}