Dow Ends 2.8% Lower as Virus Cases Surge, Bank Stocks Tumble

Stocks finished lower as concern grew that parts of the U.S. economy could be shuttered as the coronavirus resurges.
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Stocks finished sharply lower Friday as the U.S. set a record for the number of new coronavirus infections and worries grew that portions of the economy could be shuttered amid a resurgence of the virus.

Texas will roll back some reopening plans as coronavirus cases have surged and hospitalizations have soared, about two months after allowing businesses to reopen.

“As I said from the start, if the positivity rate rose above 10%, the state of Texas would take further action to mitigate the spread of COVID-19,” Texas Gov. Greg Abbott said. “At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars." 

Bars in Texas were ordered to close by noon Friday. Florida Gov. Ron DeSantis ordered bars to stop selling alcohol on site.

Anthony Fauci, the immunologist who directs the National Institute of Allergy and Infectious Diseases and is a member of the White House Coronavirus Task Force, told CNBC that as virus cases spike mostly across the American South and West, the country will soon “be seeing more deaths."

The Dow Jones Industrial Average finished down 730 points, or 2.84%, to 25,015, the S&P 500 declined 2.42% and the Nasdaq Composite slumped 2.59%.

For the week the Dow industrials dropped 3.3%, the S&P 500 gave up 2.9% and the Nasdaq Composite declined 1.9%.

Bank stocks traded lower Friday after the Federal Reserve told the biggest U.S. banks they will have their dividends capped and they can’t resume buybacks through at least the third quarter because of economic uncertainties caused by the covid-19 pandemic.

Shares of banks such as JPMorgan Chase  (JPM) - Get Report had helped stocks stage a late-session surge Thursday after the Federal Deposit Insurance Corp. approved changes to rules that would free up capital for banks and allow them to make large investments into venture capital and similar funds.

JPMorgan shares fell 5.5% Friday and Goldman Sachs  (GS) - Get Report was down 8.6%.

The U.S. has 2,446,706 cases of the coronavirus, the most in the world, according to Johns Hopkins CSSE. Deaths in the U.S. have risen to 124,749, also the most in the world.

Infections rose across the U.S. on Thursday by more than 39,800, the largest one-day increase of the pandemic and higher than the previous peak on April 24. Florida, California, Arizona and Texas account for almost half of all new cases, according to Bloomberg.

Nike  (NKE) - Get Report shares declined Friday after the world's biggest sports apparel company posted a surprise fourth-quarter loss as store closures linked to the global coronavirus pandemic hammered sales in Europe and North America.

Consumer spending in the U.S. during May rose by a record 8.2% but came in lower than economists' expectations. 

Household outlays had fallen by the most on record in April, according to the Commerce Department. Incomes fell by 4.2% after April saw a record spike, a result of the household relief payments distributed by the U.S. government.

Consumer sentiment in the U.S. slipped during late June, according to the University of Michigan. The final results for the survey in June were 78.1, down from an initial 78.9.