S&P/TSX composite plunges, Dow sinks 1,800 as virus cases rise

Canada’s main stock index plummeted on Thursday, extending its losses amid concerns about how quickly the North American economy can rebound from the COVID-19 pandemic.

The S&P/TSX composite index closed down 650.41 points at 15,050.92 after dropping 132.41 points on Wednesday, a loss of more than four per cent.

The Canadian dollar traded for 73.78 cents US compared with 74.68 cents US on Wednesday.

The Dow Jones Industrial Average sank more than 1,800 points and the S&P 500 dropped 5.9 per cent, its worst day since mid-March, when stocks had a number of harrowing falls as the virus lockdowns began.

Many market watchers have been saying that a scorching comeback in the market since late March was overdone and didn’t reflect the dire state of the economy. The S&P 500 rallied 44.5 per cent between late March and Monday.

Nearly all of the companies in the S&P 500 closed lower. Technology, financial, industrial and health care stocks accounted for a big slice of the market’s broad slide. Energy stocks were the biggest losers as crude oil prices fell sharply. Bond yields fell and the price of gold surged 1.1% as worried investors shifted money into the traditional safe-haven assets.

The selling comes as coronavirus cases rise in the U.S., with some of the increase likely tied to the reopening of businesses and the lifting of stay-at-home orders. Cases are rising in nearly half the states, according to an Associated Press analysis, a worrying trend that could intensify as people return to work and venture out during the summer.

Investor optimism for a speedy recovery in the economy was also dimmed by the Federal Reserve, which warned Wednesday that the road to recovery from the worst downturn in decades would be long and vowed to keep rates low for the foreseeable future.