US stocks had a mixed day as earning season begins
Coronavirus is reshaping consumer behaviour and markets.
The coronavirus pandemic is reshaping the global economy, and United States markets are starting to reflect that reality. After three days of gains, both the Dow and S&P 500 ended lower, while the tech-heavy Nasdaq rose.
The Dow Jones Industrial Average fell 1.39 percent to end at 23,390.77. The S&P 500, which is a gauge for retirement and educational saving accounts, lost 1.01 percent. The Nasdaq Composite Index, however, rose. It added 0.48 percent.
The mixed markets are just one indication of how the global pandemic is reshaping economies.
“The Global Coronavirus Recession (GCR) will feature the sharpest economic contraction since WWII,” writes Oxford Economics Senior US Economist Lydia Boussour in a recent report. “Assuming 10-12 weeks of social distancing from mid-March, we now anticipate real GDP [gross domestic product] will contract by over 9 percent peak to trough, with output falling.”
US companies are preparing to release quarterly earnings this month, and many analysts believe the pandemic-induced economic shutdowns will shrink earnings for a majority of US firms. A smaller number of firms, however, are expected to see increased sales because of a pandemic-induced shift in consumer behaviour.
The tech-heavy Nasdaq was lifted by increased demand from people who are staying home and shopping. Video streaming service Netflix rose 7 percent to a 52-week high. Online retailer Amazon also ended the session higher by 6.2 percent.