Stocks have moved lower on Wall Street, remaining little changed after Congress voted to pass a big financial rescue package aimed at cushioning ailing businesses and households from the coronavirus crisis.
The selling erased some of the market’s gains after a strong three-day rally that has the major stock indexes on track for their first weekly gain in three weeks. Even after the winning streak this week the market is down 25% from the peak it reached a month ago.
The S&P 500 was down 2.4% in afternoon trading, but was still up just above 11% for the week. The benchmark index shot up 17% over the previous three days as traders became hopeful that Congress would pass the 2.2 trillion dollar economic aid package.
The Dow Jones Industrial Average dropped 2.7%. It is up more than 14% for the week.
European markets also fell, but Asian markets closed mostly higher.
The bill includes direct payments to households, aid to hard-hit industries like airlines and support for small businesses. The business shutdowns that have swept across the country forced 3.3 million Americans to apply for unemployment aid last week, a historic spike.
New government data on Friday showed US consumer spending inched up 0.2% last month, matching January’s gain, but economists expect it will be down sharply in coming months, reflecting the impact of the widespread business shutdowns and layoffs.
The prospect of meaningful financial help to offset the economic damage caused by coronavirus mitigated some of the concerns about the steep job losses the economy is beginning to see, but the market is likely to see more ups and downs until the outbreak begins to wane, analysts said.
“The key at this point is getting a handle on the spread of the virus so that then we can start to think about what growth looks like for the remainder of the year,” said Willie Delwiche, investment strategist at Baird.
“As long as the scope of the virus is still so uncertain it’s really hard to make guesses about where growth is going to slow, and that adds fragility to stock prices.”
Congress’s efforts to deliver financial relief for Americans are taking on more urgency as the outbreak continues to widen. The number of cases in the US has now surpassed those in China and Italy, climbing to more than 92,000 known cases, according to Johns Hopkins University.
The worldwide total has topped 550,000, and the death toll has climbed to more than 25,000, while more than 127,000 have recovered.