(June 12): US stocks tumbled the most in 12 weeks as the torrid surge in equities came to a screeching halt amid economic jitters. Treasuries surged with the dollar.
The S&P 500 sank almost 6%, approaching the 7% threshold that would trigger an exchange-mandated trading pause. Only one company in the index -- supermarket operator Kroger Co. -- finished higher. Losses in the Dow Jones Industrial Average were even deeper, with the blue-chip gauge plunging as much as 7.1%. Airlines, cruise and travel shares that soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights slid 9%, and energy producers joined a rout in oil.
While much of the equity selling owed to the frantic pace of the recent rally, sentiment did sour as signs mounted that a possible second wave of the pandemic could be taking hold in some states. U.S. jobless claims remained high, underscoring the longer-term challenges caused by the pandemic. The report came out a day after the Federal Reserve provided a dour economic outlook. Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another surge in coronavirus cases.