Wall Street's Daydreaming is over, COVID-19 fears return

Wall Street's Daydreaming is over, COVID-19 fears return

Wall Street / Image=Wikipedia

[Newsphopick=Gyubin Lee] The runaway train on Wall Street has been derailed by a force nearly as powerful as easy money: a healthy dose of reality. The Dow plunged 1,862 points, or 6.9%, on Thursday in the biggest selloff since March 16. Even the previously red-hot Nasdaq tumbled 5.3% back below the 10,000 level.

The sharp selling was driven in large part by fears of a resurgence of the coronavirus pandemic that wrecked the economy. Several US states that reopened weeks ago are now reporting rising infections and hospitalizations. >Wall Street is unprepared for a potential second wave of the pandemic. It would completely undermine the extreme optimism about the economy that had catapulted US stocks towards record highs. 

"The rally in the stock market from the March 23 lows was simply overdone," said David Kelly, chief global market strategist at JPMorgan Funds. "We are still in a very deep recession. We still have a tremendous amount of uncertainty about the virus but also about stimulus and politics."

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