COVID-19

Market reactions to COVID-19: Stocks end the week in decline

Janet Nguyen May 1, 2020
A view of Amazon workers at Amazon's Staten Island warehouse holding a strike in March, calling for the facility be shut down and cleaned after one staffer tested positive for the coronavirus. Employees are also taking part in a nationwide strike this Friday, in protest of better working conditions. ANGELA WEISS/AFP via Getty Images
COVID-19

Market reactions to COVID-19: Stocks end the week in decline

Janet Nguyen May 1, 2020
A view of Amazon workers at Amazon's Staten Island warehouse holding a strike in March, calling for the facility be shut down and cleaned after one staffer tested positive for the coronavirus. Employees are also taking part in a nationwide strike this Friday, in protest of better working conditions. ANGELA WEISS/AFP via Getty Images

This post was updated May 1 at 8:02 p.m. Eastern time.

The major stock indexes declined on Friday after major tech companies reported how they’ve been affected by the COVID-19 pandemic. 

The Dow Jones Industrial Average declined by more than 622 points, the S&P 500 by more than 81 points and the Nasdaq composite index by more than 284 points. 

Apple failed to provide financial guidance to investors for the first time since 2003. “As COVID-19 started impacting China, iPhone supply was temporarily affected, as well as demand for our products within China. This caused us to withdraw our revenue guidance in February,” Apple CEO Tim Cook explained during a conference call on Thursday. 

Amazon also revealed how the pandemic has been affecting the company. While the tech giant’s revenue grew 26% during the first three months of the year, CEO Jeff Bezos said the company will spend the entirety of its $4 billion profit on COVID-related expenses between April and June. 

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Bezos said

Although some of this would go toward paying for personal protective equipment for Amazon’s warehouse workforce, Amazon shares declined more than 7% after the news.

The market has been seesawing this week amid the release of earnings reports, unemployment data and consumer confidence numbers, along with news from the Federal Reserve and developments surrounding a drug that could treat COVID-19. 

Stocks rose on Wednesday after a study on an experimental drug from Gilead Sciences showed that it reduced the time it takes patients to recover by 31%. The Federal Reserve also announced that it plans to keep its interest rate target between 0% and 0.25%, a range the central bank set in March. “We can do what we can do, and we will do it to the absolute limit of those powers,” Fed Chair Jerome Powell said. 

There are now more than 3.1 million confirmed cases of COVID-19 worldwide and more than 224,300 people have died, according to the World Health Organization. In the United States and its territories, the number of confirmed cases has exceeded 1.1 million, while the death toll has risen to more than 64,800.

Here’s a look at how the major stock indexes have been reacting to the news since the beginning of the year.

COVID-19 Economy FAQs

What’s the latest on the extra COVID-19 unemployment benefits?

As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.

With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?

The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.

Which businesses got Paycheck Protection Program loans?

The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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