Fed boost fails to stem Wall Street rout

By Uday Sampath Kumar and Medha Singh (Reuters) - Wall Street's slide deepened on Monday as the rapidly spreading coronavirus forced more U.S. states into lockdown, eclipsing optimism from an aggressive policy easing by the Federal Reserve and putting the S&P 500 on pace for its worst month since World War Two

Reuters March 24, 2020 00:07:42 IST
Fed boost fails to stem Wall Street rout

Fed boost fails to stem Wall Street rout

By Uday Sampath Kumar and Medha Singh

(Reuters) - Wall Street's slide deepened on Monday as the rapidly spreading coronavirus forced more U.S. states into lockdown, eclipsing optimism from an aggressive policy easing by the Federal Reserve and putting the S&P 500 on pace for its worst month since World War Two.

After cutting interest rates to near zero and offering to buy more Treasury bonds and mortgage-backed securities, the Fed will now lend against student loans and credit card loans, as well as back the purchase of corporate bonds and direct loans to companies.

The extraordinary moves briefly lifted U.S. stock index futures more than 3%, but the mounting death toll from COVID-19 and growing evidence of the economic damage to Corporate America quickly sent the main indexes back into the red.

"It's their bazooka moment, which should be a sign to investors that the Fed will provide any and all liquidity necessary to support the economy through this period," said Russell Price, chief economist at Ameriprise Financial Service in, Troy, Michigan.

"But quite frankly, the market is just in a waiting period right now until the virus runs its course and some of the therapies and other treatments are able to improve outcomes."

Investors had hoped the U.S. Senate would clear a $1 trillion-plus coronavirus stimulus package over the weekend, but Democrats and Republicans were still scrambling to come to an agreement.

Ohio, Louisiana and Delaware have now joined New York and California in asking people to stay home, foreshadowing a near halt in economic activity and more pain for U.S. equities, which have already lost more than $9 trillion in value since a record high hit last month.

Goldman Sachs expects an outright contraction in global real GDP in 2020 on the back of a 24% plunge in U.S. real GDP in the second quarter: two-and-a-half times as large as the previous post-war record.

At 11:49 a.m. ET the Dow Jones Industrial Average <.DJI> was down 908.45 points, or 4.74%, at 18,265.53, while the S&P 500 <.SPX> was down 107.63 points, or 4.67%, at 2,197.29 and the Nasdaq Composite <.IXIC> was down 234.88 points, or 3.41%, at 6,644.63.

The energy sector <.SPNY> fell 5%, tracking a plunge in oil prices.

Exxon Mobil and Chevron were among the biggest drags on the Dow <.DJI>.

Hasbro rose 10.84% after the toy maker's Chief Executive Officer Brian Goldner said its supply chains were up and running in China.

Declining issues outnumbered advancers more than 5-to-1 on the NYSE and 3-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 195 new lows, while the Nasdaq recorded two new highs and 401 new lows.

(Reporting by Uday Sampath in Bengaluru; Additional reporting by Sinead Carew in New York; Editing by Sagarika Jaisinghani and Arun Koyyur)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Pulitzer Prize-winning photojournalist Danish Siddiqui killed in Afghanistan: Politicans, journalists pay tributes
India

Pulitzer Prize-winning photojournalist Danish Siddiqui killed in Afghanistan: Politicans, journalists pay tributes

The Pulitzer prize winner, who was in Kandahar covering operations against Taliban, was killed when he was riding along with the Afghan Special Forces

Indian photojournalist Danish Siddiqui killed during assignment in Afghanistan's Kandahar province
India

Indian photojournalist Danish Siddiqui killed during assignment in Afghanistan's Kandahar province

Siddiqui had also covered the 2020 Delhi riots, COVID-19 pandemic, Nepal earthquake in 2015 and the protests in Hong Kong

Danish Siddiqui's passing is a reminder of the high price one pays for showing the truth
India

Danish Siddiqui's passing is a reminder of the high price one pays for showing the truth

Danish's photographs were not just documentation, but the work of someone who went down to eye-level, as they say in photographic parlance.