US stocks post modest weekly losses amid gloomy data, Fed decision

NEW YORK (Xinhua) – United States (US) equities declined in volatile trading in the past week as Wall Street digested the Federal Reserve’s policy update and a slew of dismal data.

For the week, the Dow decreased 0.22 per cent, the S&P 500 lost 0.21 percent and the Nasdaq dipped 0.34 per cent.

A batch of latest data showed the COVID-19 fallout continued to ripple through the US economy.

About 3.84 million Americans filed for unemployment benefits in the week ending April 25, bringing the total number of claimants in the past six weeks to 30 million due to the coronavirus crisis, the Bureau of Labor Statistics reported on Thursday.

US personal income fell two per cent in March and personal consumption expenditures plunged a record 7.5 per cent last month, according to the Bureau of
Economic Analysis.

Earlier the week, the Commerce Department reported that US real gross domestic product (GDP) in the first quarter contracted at an annual rate of 4.8 per cent, the biggest quarterly decline since the 2008 financial crisis.

US manufacturing Purchasing Managers’ Index registered 41.5 per cent in April, down sharply from the March reading of 49.1 per cent, the Institute for Supply Management reported on Friday. Any reading below 50 per cent indicates the manufacturing sector is generally contracting.

“As for the hit to economic growth in the United States, the contraction was largely expected, and we should also expect further declines in Q2,” analysts at Zacks Investment Management said in a note.

With declining GDP and a recession fuelled by social distancing, the current market has many investors concerned for their financial future, they added.

As of Saturday afternoon, more than 1.12 million confirmed COVID-19 cases have been reported in the US, with over 65,000 deaths, according to the Center for Systems Science and Engineering at Johns Hopkins University.

Stressing multiple risks from COVID-19, the Federal Reserve on Wednesday vowed to “use its tools and act as appropriate to support the economy”.

The Fed also expects to maintain its benchmark interest rate at the record-low level of near zero “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals”.