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US close: Stocks head south to wrap up worst quarter on record

By Iain Gilbert

Date: Wednesday 01 Apr 2020

US close: Stocks head south to wrap up worst quarter on record

(Sharecast News) - US stocks closed lower on Tuesday, shrugging off some strong manufacturing data out of China to wrap up the worst first quarter on record for the Dow and S&P 500.
At the close, the Dow Jones Industrial Average was down 1.84% at 21,917.16, while the S&P 500 was 1.60% softer at 2,584.59 and the Nasdaq Composite saw out the session 0.95% weaker at 7,874.83.

The Dow closed 410.32 points lower on Tuesday after closing out the previous session in the green as Johnson & Johnson identified a lead candidate for coronavirus treatment and the White House extended measures to contain the spread of the outbreak.

Sentiment initially a boost on Tuesday from the announcement of a more realistic government approach to contain the pandemic after Donald Trump extended the timeline for social distancing guidelines until 30 April over the weekend - which many believe will help limit the economic fallout from the Covid-19 pandemic in the long run.

News that China's official manufacturing purchasing managers index for manufacturing rose to 52.0 in March, up from a record low of 35.7 seen in February, also helped paint market participants a picture of how long it may take the US economy to recover from the outbreak.

China's official non-manufacturing purchasing managers index also climbed in March - up to 52.3 from a record-low reading of 29.6 in February.

However, sentiment took a hit late in the session after Donald Trump warned Americans of a "very, very painful two weeks" as he projected somewhere between 100,000 and 240,000 coronavirus-related deaths in the US.

Confirmed Covid-19 cases in the US have risen to more than 153,200, according to Johns Hopkins University, while global cases have topped 800,000. But Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, did note on Tuesday that he was starting to see "glimmers" that social distancing was helping to lessen the spread of the coronavirus in the US.

On the macro front, house price inflation in the US picked up by less than expected at the start of 2020, the results of a closely watched set of surveys revealed. The year-on-year rate of increase in Standard&Poor's CoreLogic Case-Shiller home price index accelerated from a 3.7% clip in December to 3.9% for January.

Elsewhere, a measure of business conditions in the Chicago region slipped to 47.8 in March, down from a reading of 49.0 recorded a month earlier, according to the Institute of Supply Management.

Lastly, a popular gauge of consumer confidence in the US revealed what the survey compiler termed a "worrisome" worsening in Americans' short-term outlook which pointed to a "severe contraction".

The Conference Board's consumer confidence fell from a reading of 132.6 for February to 120.0 in March. That was better than the fall to 114.0 that economists had anticipated, as consumers' view on the present situation help up better than had been expected.

No major corporate earnings were released on Tuesday.

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