New York (AFP)

The New York Stock Exchange closed sharply lower on Wednesday, concerned about the exponential increase in contamination by coronavirus in several American federated states and by its possible consequences on the economy of the country.

Its flagship index, the Dow Jones Industrial Average fell 2.71% to 25,447.31 points.

The Nasdaq, with a strong technological coloring, lost 2.19% to 9,909.17 points.

The broad S&P 500 index lost 2.59% to 3,050.33 points.

For Quincy Krosby, head of market strategy at Prudential Financial, "it is not only the increase in the number of cases, but also that of hospitalizations" that is tormenting the market.

White House chief immunologist Dr. Anthony Fauci said on Tuesday that he was "really" concerned about the "worrying" surges in the number of cases in several American states. "The next two weeks will be critical" to respond, he said.

The deteriorating health situation poses the threat of a halt to the global and American economic recovery.

In this regard, the International Monetary Fund (IMF) released on Wednesday a forecast of global recession of 4.9% this year. This is much worse than the 3% expected in April, at the height of the pandemic, when the IMF already stressed that it was the worst crisis since the Great Depression of the 1930s.

In the United States, the GDP should collapse by 8%, well beyond the 5.9% decline estimated in April.

Another reason for concern for the markets: the specter of additional punitive taxes imposed by the United States on the equivalent of 3.1 billion dollars of European products, including French, according to an official document published on the night of Tuesday at Wednesday.

The services of the United States Trade Representative have drawn up the list of new products concerned in a call for public consultation which will last until July 26.

In addition, the stock market, which had progressed enormously these last weeks, operated a technical decline Wednesday.

According to Ms Krosby, this is partly linked to the fact that pension funds are in the midst of a rebalancing of their assets as the end of the month approaches.

"The pension fund managers have had good results with their equity portfolio and are expected to sell some of it to invest in the bond market," said Krosby.

Most of the rates on the American debt were in fact down sharply, a sign of an increased interest in bonds, whose yield declines when the price of treasury bills rises.

The 10-year rate was thus 0.6774% around 20.25 GMT, against 0.7118% Tuesday evening.

© 2020 AFP