US STOCKS-Wall Street finishes lower on rising virus cases, weak economic view

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By Sinéad Carew and Chuck Mikolajczak
NEW YORK, June 24 (Reuters) - Wall Street's three major
indexes suffered their biggest daily percentage drop in almost
two weeks on Wednesday as a surge in U.S. coronavirus cases
intensified fears of another round of government lockdowns and
worsening economic damage.
The United States has recorded the second-largest rise in
infections since the health crisis began, with a flare-up of
cases in states where restrictions meant to contain the disease
were lifted early. Highlighting the seriousness of the resurgence in cases for
many investors, the governors of New York, New Jersey and
Connecticut announced that visitors from states with high
coronavirus infection rates must self-quarantine for 14 days on
arrival. "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," said Art Hogan, chief market strategist at
National Securities in New York.
Shares of U.S. airlines, resorts and cruise operators
slumped as these sectors have been hardest hit by lockdowns.
Royal Caribbean Cruises Ltd RCL.N , Norwegian Cruise Line
Holdings Ltd NCLH.N and Wynn Resorts WYNN.O all tumbled
along with the NYSE Arca Airline index .XAL plunged.
The pandemic also appeared to be causing wider and deeper
damage to economic activity than first thought. The IMF said it
now expects global output to shrink by 4.9%, compared with a
3.0% contraction predicted in April. Advanced economies have been particularly hard hit, with
U.S. output now expected to shrink 8.0%, more than 2 percentage
points worse than the April forecast.
Wall Street's fear gauge, the CBOE volatility index .VIX ,
rose to a one-week high of 37.12 during the session.
Unofficially, the Dow Jones Industrial Average .DJI fell
704.68 points, or 2.69%, to 25,451.42, the S&P 500 .SPX lost
80.78 points, or 2.58%, to 3,050.51 and the Nasdaq Composite
.IXIC dropped 224.27 points, or 2.21%, to 9,907.10.
Before Wednesday's sell off, a slate of better-than-feared
economic reports, easing lockdowns and massive stimulus measures
had powered the Nasdaq to an all-time high and put the benchmark
S&P 500 on track for its best quarterly performance since 1998.
"The market seemed pretty confident we were going to be in
much better shape in 4-6 months from now. With the resurgence of
cases they're starting to discount that," said Shawn Cruz,
senior manager for trader strategy at TD Ameritrade in Jersey
City, New Jersey.
Cruz also cited increasing tensions between the United
States and Europe. On Tuesday the New York Times reported that
Europe might not allow visitors from the United States when it
reopens.
Then the United States moved to maintain pressure on the
European Union in a 16-year dispute over aircraft subsidies by
flagging possible changes in tariffs on EU goods, as the date
for a decision on reciprocal EU duties slipped to the autumn.
In addition to coronavirus concerns, Carnival Corp CCL.N
faced a credit rating downgrade by Standard & Poor's for its
bonds to junk status as the agency forecast continued weak
demand for the cruise industry. Dell Technologies Inc DELL.N was a bright spot, as its
shares jumped after a report said the company was considering
spinning off its roughly $50 billion stake in cloud computing
software maker VMware Inc VMW.N .