US stocks suffer worst drop in 12 weeks amid second wave coronavirus fears

The drop is the worst in 12 weeks, and has sparked fears a second wave of coronavirus will devastate the US economy

US stocks suffered their worst losses in three months amid fears a second wave of coronavirus may be on the verge of sweeping the country. The Dow Jones industrial index of America’s 30 largest publicly listed companies closed 7% at 25,194 points after losing 1,795 points since trading kicked off this morning.

The larger Standard & Poors index of 500 US companies closed 6% down – close to the 7% drop that would have seen trading automatically suspended by a ‘circuit breaker’ aimed at stopping potentially destructive mass-selling of stocks.

Thursday’s grim figures come amid weeks of stock market gains, amid hopes the US economy was on the road to recovery after closing down to try and combat the spread of coronavirus, which has killed more than 110,000 Americans and infected over two million.

Hard-hit airlines, cruise companies and travel operators bore the brunt of Thursday’s losses as states including Florida, Texas and Arizona recorded worrying rises in the number of coronavirus hospital admissions.

Texas saw the number of Covid-19 patients hospitalized rise by over 6.3% yesterday, to 2,063. Meanwhile, hospitals in Arizona are preparing for a possible surge in coronavirus cases that they have warned may overwhelm capacity.

All US states have now begun reopening, although some – like Georgia – have moved much faster to end closures than others, such as hard-hit New York.

Thursday saw figures released showing another 1.5 million people had filed for unemployment across the United States in the last week.

Well over 40million people have been left out of work since the outbreak began in March. But US Labor Department figures released last Friday showed 2.5million new jobs had been created throughout May, as reopening began.

That saw the unemployment rate sit around 13.7% – far below the 20% economists had feared, and which had sparked worries of a depression.

President Trump has long trumpeted stock market gains as evidence of his economic policies working, and hailed recent gains – but has yet to comment on Thursday’s losses.

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