Dow dives on coronavirus surge

OAKLAND, Calif. - The closing bell ended with the Dow Jones Industrial Average down 6.9% Thursday, with a 1,861-point plunge that left all Dow companies in the red, and left investors with whiplash.

"It's very volatile. Don't really know which way it's going to go. It can go up 1,000 points one day and crashes back down 1,000 points the next day so it's kind of just a bit unnerving," said Ben Kou of Walnut Creek.

Concern over new spikes of coronavirus cases sent Boeing and airline stocks, cruise operators, and the hotel hospitality sector into a dive.

Financial firms such as Goldman Sachs also fell, as investors reacted to the Federal Reserve's forecast Wednesday that unemployment would remain high and interest rates would stay near zero.

Thursday the Labor Department said 1.54 million Americans filed for first-time unemployment benefits last week.

President Trump blasted the Fed's outlook with a tweet saying, "The Federal Reserve is wrong so often...We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021."

Sylvia Allegretto, an economist at U.C. Berkeley's Center on Wage & Employment Dynamics, says the high unemployment and other economic data don't point to a quick turnaround.

"No, it's not going to be one of our best years ever in 2021," said Allegretto, "We're still down over 20 million jobs. We still have unemployment rates and underemployment rates well over 20%."

The U.S. now has more than 2 million confirmed coronavirus cases.

In 20 states the seven-day average has increased, according to an analysis by the Associated Press.

Public health officials expect more spikes, with all 50 states easing restrictions, and large protests over the death of George Floyd.

Treasury Secretary Steven Mnuchin said Thursday the U.S. economy cannot be shut down again, even if there is second wave of COVID19 cases.

Allegretto says the federal government needs to work on relief efforts for state and local governments, businesses and unemployment benefits to keep the economy going.

"We might be in this world of flaring coronavirus for years and we need policies that support workers, small and medium businesses through that turbulence," said Allegretto.

"There is no separating out the virus from the economy," said Allegretto, "In the end if we start to see huge amounts of spread in the virus and hospitalization rates going up to the point where hospitals are overwhelmed, where deaths start going up at a quicker pace, people will be afraid to go to work."

Mnuchin said the Trump administration is prepared to work with Congress on more relief if needed.