Stocks sank Thursday as states from Arizona to Florida, North Carolina and Texas and some international markets reported rising coronavirus case counts. Companies like theater chains with the most at stake for a smooth reopening were hit the hardest.
Shares of Cinemark and National CineMedia were down over 11% and 12% respectively in afternoon trading. AMC Entertainment had plunged more than 1% after days of gains. Marcus, which announced phased reopening plans this morning, was off 8%. (Airlines, cruise lines and hotel stocks were also getting killed).
The DJIA had plunge by more than1,700 points, or nearly 6.5%, it’s worst showing since mid-March. The S&P 500 was down well over 5%, with only four stocks in the entire index in positive territory at one point
Among the big cap names, Walt Disney was down about 7.5% and Comcast over 4%. Disney recently announced plans to reopen both Disneyland and Walt Disney World in July. Sports is also taking steps to restart. Sinclair Broadcast Group was down nearly 12%.
ViacomCBS had lost 3.6%. Tech stocks were all down with Netflix, the premiere stay-at-home stock holding steadier than others, off only 1.5%. Amazon was down 2.6%
It was the market’s third and most dramatic session of losses and followed comments by the Federal Reserve yesterday about ongoing economic concerns and measures it was taking. The regular Federal Open Market Committee’s (FOMC) Summary of Economic Projections indicated that the central bank anticipates a sharp 6.5% contraction in GDP this year with an unemployment rate of 9.3%. It sees GDP rebound by 5% in 2021 and the unemployment rate dropping to 6.5%.
The Fed projected interest rates would remain near zero through 2022. Markets had largely expected that so it didn’t help.
The downturn didn’t surprise market pundits, many of whom felt the recent rally had been overdone given major uncertainties around the pandemic and the economy.