Wall Street’s three major indexes tanked Wednesday on news that coronavirus cases are skyrocketing to record highs in several states, raising risks of more economic fallout from the pandemic, plus more in today’s Closing Bell on Money & Markets.

States See Record Numbers of Cases

Several states including Texas, Arizona and Florida saw record increases in the number of coronavirus cases while Washington state enacted a mandatory mask order in public places, sending market sentiment into the toilet.

Governors from New York, New Jersey and Connecticut also enacted a mandatory 14-day self-quarantine for anyone visiting from a state with a high infection rate.

“Markets have to start taking that seriously as it might impact the pace of the economic recovery and different states roll out plans,” said Art Hogan, chief market strategist at National Securities in New York. “Today was finally the day markets came to terms with the fact that increasing COVID-19 cases could mean a slower recovery in the economy.”

Recovery stocks like U.S. airlines and cruise operators were hit hard during the day’s crash. The NYSE Arca Airline Index was trading 6.7% lower in the afternoon.

The S&P 500’s energy sector also was hammered as crude oil prices slumped on the possibility of more demand issues because of the pandemic.

The Nasdaq Composite fell 2.19%, the S&P 500 sank 2.59% and the Dow Jones fell 2.72%.

Stock Market Update: Closing Bell*

S&P 500: 3,050 (-2.59%)
DOW: 25,445 (-2.72%)
NASDAQ: 9,909 (-2.19%)
1,389 (-3.45%)
$1,764.80 (-0.15%)
BITCOIN: $9,302.94 (-3.65%)
U.S. 10-YEAR YIELD: 0.68% (-0.028)

*- as of 4:15 p.m.

A Big Win

Peloton Interactive Inc. (Nasdaq: PTON) suffered a fairly large sell-off as the stock market opened, but then recovered to close 1.2% higher.

VMware Inc. (NYSE: VMW) managed to stay positive throughout the day following a morning sell-off. The stock rose 2.3%.

Golden Nuggets

Gold followed stocks lower after hitting an almost eight-year high Tuesday — but the move down was slight.

U.S. spot gold was trading 0.15% lower at $1,764.80 per ounce.

“People are just going toward cash. They’re lightening up the investments in their portfolios,” said Michael Matousek, head trader at U.S. Global Investors. “When it’s risk-off for pretty much everything, you have people selling gold. They’re selling a little bit of everything across the board.”

Gold futures were down slightly 0.36%.

Other precious metal futures also slumped. Silver traded 2.59% lower while palladium was down 3.64%. Platinum futures took the biggest hit, trading 5.43% lower.

Cannabis Corner

A nonpartisan official from Justice Department has accused U.S. Attorney General William Barr of leveling antitrust investigations into 10 cannabis companies based solely on his opposition to cannabis legalization.

In a statement released Wednesday, John W. Elias, former Chief of Staff within the Justice Department’s Antitrust Division, said the investigations did not meet antitrust criteria.

“These mergers involve companies with low market shares in a fragmented industry; they do not meet established criteria for antitrust investigations,” Elias wrote.

Elias was expected to testify to the House Judiciary Committee on Wednesday.

Fed’s Evans: US Recovery Will Take Years

Chicago Federal Reserve Bank President Charles Evans on Wednesday said he expects the U.S. economy to take until late in 2022 to recover to its pre-COVID level of output, with some economic growth permanently lost in the aftermath of the pandemic.

“Even after three years, my projected recovery places us below where the economy would have been had the virus not occurred,” he told a Corridor Business Journal conference in Iowa. “The economic impact has been catastrophic for an extraordinarily large number of people and businesses, (and) sadly, the cost has fallen most heavily on some of our most vulnerable populations.”

Today’s Big Winners

S&P 500: Kroger Co. (NYSE: KRO) +2.2%

Nasdaq: T-Mobile US Inc. (Nasdaq: TMUS) +1.2%

Dow: N/A

Today’s Big Losers

S&P 500: Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) -12.4%

Nasdaq: Wynn Resorts Ltd. (Nasdaq: WYNN) -11%

Dow: Dow Inc. (NYSE: DOW) -7%

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