Shares fell Wednesday as central bank officials warned more fiscal stimulus is needed to bail out a struggling US economy.
The Dow Jones Industrial Average was down 428 points, or 1.57%, to 26,859, the S&P 500 was down 1.9% and the Nasdaq by 2.57%. Amazon.com (AMZN) – Get report and alphabet (GOOGL) – Get report it decreased between about 2% and 3%.
Federal Reserve Vice President Richard Clarida, like Fed Chairman Jerome Powell before him, reiterated that the central bank believes that “additional fiscal support is likely to be needed” to lift the US economy out of the coronavirus-related recession.
Powell warned in Congressional testimony Tuesday that a US recovery from the coronavirus pandemic that killed more than 200,000 Americans “continues to be highly uncertain.”
“The recovery will go faster if there is support from both Congress and the Fed,” Powell said.
Nike (NKE) – Get report was the top gainer on the Dow, up 9.3%, after the apparel and sports equipment giant posted better-than-expected fiscal first-quarter earnings. Nike brand digital sales increased 82% overall in the quarter.
Johnson & Johnson (JNJ) – Get report it rose 1.21% after the healthcare giant said it started the final round of testing for its coronavirus vaccine candidate.
Johnson & Johnson said the single dose, which will be tested on 60,000 trial participants, followed positive data from a phase 2 trial. The company reiterated its goal to manufacture and supply more than 1 billion doses of the vaccine – if approved by regulatory authorities – in the course of 2021, and aims to make a decision on the vaccine’s effectiveness by the end of the year or early 2021.
Tesla (TSLA) – Get report Shares fell 8.8% to $ 386.90 after the electric automaker’s battery unveiling disappointed investors.
CEO Elon Musk outlined his company’s ambitious battery manufacturing and cost reduction goals, but detailed how long it may take to achieve those goals.
Musk said the cheaper and more efficient batteries will ultimately allow Tesla to “make a compelling $ 25,000 car that is also fully autonomous.”
The new batteries, however, will take some time to accelerate. Tesla said the 4680 batteries will not reach mass production until 2022. Tesla has set goals of having 100 gigawatt hours (GWh) of annual production capacity by 2022 and a whopping 3 terawatt hours (TWh) of capacity by 2030.
Global equities remain on track for their first monthly decline since March. Prior to Wednesday, the S&P 500 was down 5.3% in September, while the Nasdaq was down nearly 7%.
Equity markets traded lower in the first three weeks of September on fears that rising coronavirus infections around the world could lead to further lockdowns and the lack of another fiscal stimulus package in the United States.