US stocks turned lower on Friday, giving up an early rally, after New York became the latest major state to mandate nearly all workers to stay home to limit the spread of the coronavirus.
The action taken by New York governor Andrew Cuomo, a day after California announced similar measures, is another sign that large swathes of the US economy are coming to a standstill as restaurants, retailers and other businesses dependent on consumer traffic are forced to close or lay off workers.
The Dow Jones Industrial Average erased an early gain of 444 points and was down 180 points, or 0.9%, in early afternoon trading.
The losses wiped out the index’s gains from a day earlier and deepened the market’s losses in what has been another brutal week on Wall Street. The Dow is down 14% for the week.
Investors are weighing the likelihood that the global economy is entering a recession because of the massive shutdowns and layoffs caused by the outbreak against steps by central banks and governments to ease the economic pain.
Ultimately, investors say they need to see the number of new infections stop accelerating for the skid to ease.
The S&P 500, the benchmark for many index funds held in retirement accounts and the measure preferred by professional investors, was down 1.1% after being up 1.8% earlier. The index is down 29.6% since reaching a record high a month ago, and is close to its lowest point since late 2018.
The downbeat start for the US indexes followed solid gains across markets in Europe, while markets in Asia closed higher.
On Thursday, the European Central Bank launched a programme to inject money into credit markets by purchasing up to 750 billion euros in bonds.
The Bank of England cut its key interest rate to a record low of 0.1% and restarted its own programme of money injections into the financial system.
Australia’s central bank cut its benchmark lending rate to 0.25%, and central banks in Taiwan, Indonesia and the Philippines also cut rates.
They are trying to reduce the impact of a global recession that forecasters say looks increasingly likely as the US and other governments tighten travel controls, close businesses and tell consumers and travellers to stay home.
The US Federal Reserve unveiled measures on Thursday to support money market funds and the borrowing of dollars as investors in markets worldwide hurry to build up cash as insurance against falling asset prices.