Stocks fell on Wednesday as traders grew worried about the increasing number of newly confirmed coronavirus cases, which raised concern about the economic reopening and recovery.

The Dow Jones Industrial Average dropped 500 points, or 1.9%. The S&P 500 traded 1.7% lower while the Nasdaq Composite slid 1.4%. The tech-heavy Nasdaq was headed for its first daily decline in nine sessions.

The major averages hit their lows of the day after Bloomberg News released headlines signaling a rise in Florida’s Covid-19 hospitalization rate along with a rise in the state’s number of confirmed cases.

“Markets pause with all eyes on the virus and the reopening heading into the summer months,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities, in a note.  The health side is back front and center as both monetary and fiscal liquidity has been factored in short-term. We have entered a new phase of this crisis.”

A CNBC analysis of Johns Hopkins University data found the U.S. 7-day average of coronavirus cases surged more than 30% from a week ago after the total number of cases grew by more than 31,000 on Monday. California is one of the states that has seen a dramatic spike in cases, adding more than 6,000 on Monday alone. In Texas, the Covid-19 hospitalization rate has hit a record for 12 straight days. “We’re going to eclipse the totals in April, so we’ll eclipse 37,000 diagnosed infections a day,” former Food and Drug Administration Commissioner Dr. Scott Gottlieb told CNBC’s “Squawk Box.” “But in April we were only diagnosing 1 in 10 to 1 in 20 infections, so those 37,000 infections represented probably half a million infections at the peak.”

Overseas, Germany reported a cluster of newly confirmed cases at a slaughter house in Lower Saxony. That’s the latest in a series of coronavirus outbreaks in Germany. Shares of companies primed to benefit from the economy reopening faltered. United Airlines fell 5.9%. Delta, American and Southwest all slid over 4%. Carnival, Norwegian Cruise Line and Royal Caribbean were lower by 9.7%, 10.9% and 10%, respectively. Retailer Gap also fell 8%. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Tuesday the U.S. is seeing a “disturbing” surge in new Covid-19 cases.“This raises many questions but the most important is the policy direction,” said Tom Lee, head of research at Fundstrat Global Advisors, regarding the spike in cases. “We still see positive risk/reward in stocks and as we have said for some time, equities are in the hands of buyers.” Lee added that if the S&P 500 can stay above its 76% retracement levels, new highs will be hit this summer.

Weekly jobless claims stayed above 1 million for the 13th consecutive week as the coronavirus pandemic continued to hammer the U.S. economy.

First-time claims totaled 1.5 million last week, higher than the 1.3 million that economists surveyed by Dow Jones had been expecting. The government report’s total was 58,000 lower than the previous week’s 1.566 million, which was revised up by 24,000.

The elevated claims number persists even as all states have reopened to varying degrees and nonfarm payrolls grew by 2.5 million in May. Before the coronavirus, the record for a single week was 695,000 in September 1982.

“The 58K drop in claims this week is very disappointing, given that the level still remains so high; the worst single week after the crash of 2008 saw claims at 665K,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “It’s not clear why claims are still so high; is it the initial shock still working its way up through businesses away from the consumer-facing jobs lost in the first wave, or is it businesses which thought they could survive now throwing in the towel, or both? Either way, these are disappointing numbers and serve to emphasize that a full recovery is going to take a long time.”

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