The major averages fell sharply on Friday due to a spike in coronavirus cases and news Texas will roll back some of its reopening measures. The Dow Jones Industrial Average closed down 730 points or 2.8%, at 25,015. The S&P 500 slid 4.2% to 3,009 while the Nasdaq Composite dropped 2.6% to close at 9,757. This was the second weekly drop in three weeks. The Dow and S&P 500 fell 3.3% and 2.9%, respectively, for the week and the Nasdaq lost 1.9% in that time period.
Texas ordered all bars and establishments that receive more than 51% of their gross receipts to close. Restaurants, meanwhile, must limit on-premise dining to less than 50% indoor capacity. Florida also announced it would suspend "on premises consumption" of alcohol at bars in the state after reporting a surge of nearly 9,000 new virus cases. In Arizona, the number of cases jumped by 5.4%, topping a seven-day average of 2.9%. At a nationwide level, the daily average number of confirmed coronavirus cases is now more than 33,000.
The banks also lent support to the sell off after the Federal Reserve's annual stress test showed some banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic.
Because of this, banks must suspend share repurchase programs and cap dividend payments at current levels for the third quarter. Wells Fargo and Capital One may be forced to cut their dividends, according to a Morgan Stanley analyst. The announcement sent some bank shares lower on Friday. Bank of America and JPMorgan Chase both fell more than 5%. Wells Fargo slid 7.4% and Goldman Sachs fell 8.7%.
In other news, Facebook fell 8%, Alphabet fell 5.7% and Twitter fell 7.4% as Verizon, Unilever and Honda Motor joined a growing list of companies that paused online ad spending due in part to misconduct on certain platforms like Facebook.
In other developments, Nike fell 7.6% after missing top and bottom-line estimates. Cisco was the lone Dow component to close higher amid news that the Trump administration is thinking about helping the company in 5G development.
Quarter-end rebalancing might have played a part in today's decline, too, as investors re-allocated money into bonds. The 2-yr yield was unchanged at 0.16%, while the 10-yr yield declined four basis points to 0.64%. The U.S. Dollar Index was little changed at 97.45. WTI crude declined 0.7%, or $0.26, to $38.49/bbl.
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