Stocks fell for the second day in a row Wednesday on Wall Street, weighed down by worries about a slow recovery for the economy, the AP reports. The weakness came after Federal Reserve Chair Jerome Powell warned about the threat of a prolonged recession because of the shutdowns related to the coronavirus pandemic. The S&P 500 lost 1.7%. The sharpest losses hit stocks that most need a healthy economy for their profits to grow, like energy companies and banks. The market has been wavering the last few weeks as optimism about reopening the economy collides with worries about the dangers of lifting restrictions too soon.
Powell cautioned Wednesday that numerous bankruptcies among small businesses and extended unemployment for many people remain a serious risk, per the AP
. "We ought to do what we can to avoid these outcomes," Powell said. Additional rescue aid from government spending or tax policies, though costly, would be "worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery," he said. "Deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy," the chairman warned in his prepared remarks before holding an online discussion with the Peterson Institute for International Economics. "Avoidable household and business insolvencies can weigh on growth for years to come."
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