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Wall Street stocks tumble as US overtakes China in highest number of Covid-19 infections

Wall Street stocks tumble as US overtakes China in highest number of Covid-19 infections
US markets dropped on Friday as the House of Representatives is expected to vote on a $2 trillion stimulus bill to contain the coronavirus spread. Almost 86,000 Americans have now contracted the virus, the most in the world.

The Dow Jones Industrial Average tanked more than 900 points at the opening, ending a three-day rally on Wall Street. Both the S&P 500 and the Nasdaq Composite are also down around three percent.

The US Labor Department reported on Thursday a record number of jobless claims which surged to 3.28 million. The number eclipsed the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982.

The US government’s long-anticipated $2 trillion stimulus package is due to be passed after the Senate approved the bill late Wednesday. The economic relief plan includes direct payments to Americans as well as loans to businesses that were forced to close due to the nationwide lockdown in an effort to contain the virus outbreak.

President Donald Trump said on Friday the US and China are “working closely together” in the fight against the virus.

“China has been through much & has developed a strong understanding of the Virus,” Trump said on Twitter. “We are working closely together. Much respect!”

After the huge rally of the past three days, the Dow is still on track for its best week since 1938. As for the broader S&P 500, it may have its best week since 2009.

“We believe medium-term risks are skewed to the downside after this rally,” Barclays’ chief US equity strategist, Maneesh Deshpande, told CNBC. “Two other uncertainties facing investors (the length of the economic quarantine required to contain the virus and the ultimate economic damage) remain unresolved.” Deshpande added: “Bear market ‘head-fake’ rallies are not uncommon.”

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