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How COVID-19 has affected companies in Virginia and the rest of the U.S.

covid-19 economy
(© Alexander Borisenko –

The coronavirus pandemic (COVID-19) has had a profound impact on the global economy, which can be observed everywhere from the crashes of the world’s major stock indices to the fortunes of companies based in Virginia. Lockdown measures and travel restrictions have severely inhibited some sectors’ ability to deliver their services, whereas other industries have been better-suited to making gains during these generally bleak times.

How the biggest companies have fared during COVID-19

Looking at the state of the US economy provides context for the performance of Virginia-based companies. The Dow Jones Industrial Average is one of the best barometers for the American economy, as it is a price-weighted index shaped by the shares of 30 of the largest companies in the country. Early signs suggested that the American economy would be insulated from the worst of the pandemic, with the Dow Jones all-time high secured on February 12 when the index closed at 29,551.42.

As the pandemic sent unemployment skyrocketing and brought entire industries to a standstill, the Dow Jones moved in the opposite direction. March was record-breaking in a different way, with the loss of 3000 points on March 16 the Dow’s biggest-ever daily decline. Traders had woken up to the magnitude of the problems presented by COVID-19, with many of the biggest American companies on the Dow unable to stay robust as the pandemic took hold.

The closures of movie theaters and theme parks saw Disney lose major revenue streams, while McDonald’s global same-store sales reduced by 22% in March as restaurants closed across the world. Aerospace giant Boeing felt the brunt of the pandemic even more significantly, enduring a 70% fall in shares amid concerns about long-term liquidity in a period when travel was hugely restricted.

Other Dow companies have proven more capable of riding out the storm, with Merck & Co and UnitedHealth Group able to operate with a semblance of normality given the continued demand for pharmaceutical and healthcare services respectively. Tech giants Microsoft and Apple have also been able to recover from heavy losses in the March crisis, with their deep pockets and the value of their services during lockdown inspiring trust in investors.

How Virginia companies have performed in the pandemic

Shares from Virginia companies have behaved in similar ways to their counterparts on the Dow, proof of the usefulness of the DJIA as a representation of the US economy. The Dow companies heavily reliant on physical custom, such as Disney and McDonald’s, struggled in February and March, so it is no surprise that the shares for hospitality giant Hilton Worldwide dropped by around 40% between January and mid-April.

Capital One, with headquarters in McLean, mirrored the trajectory of Dow component American Express, with fears of rising credit card debt sending lenders’ shares downwards in February and March. Chesapeake-based retailer Dollar Tree saw its stock fall by 11.5% in March, although anticipated demand for discount stores has since seen Dollar Tree shares surpass pre-pandemic levels.

As with the Dow, Virginia-based companies in health sectors have shown resilience to the effects of COVID-19. Healthcare outsourcers Maximus Inc. saw shares driven down by the March crash, but were able to return to pre-coronavirus levels much quicker than companies from other industries. The companies that have posted meaningful gains following March lows are from sectors that have been able to conduct business with relative normality.

The long-term effect of the coronavirus pandemic on the US remains unclear, although the next few years are bound to be testing for the global economy. The fluctuations of the Dow Jones remain one of the best indications of the state of the American economy, with companies in Virginia facing the same challenges as some of the nation’s biggest names.

augusta free press
augusta free press