Wall Street deepens historic slump as virus response comes up short

By Caroline Valetkevitch NEW YORK (Reuters) - Wall Street suffered its biggest drop since 1987 on Monday, with the S&P 500 closing at its lowest level since December 2018, as investors fear the coronavirus pandemic is proving a tougher opponent than central banks, lawmakers or the White House are currently capable of battling. The S&P 500 tumbled 12%, its biggest drop since 'Black Monday' three decades ago, despite the Federal Reserve's surprise move late Sunday to cut interest rates to near zero, its second emergency interest rate cut in less than two weeks and ahead of its scheduled policy meeting on Tuesday and Wednesday. That added to alarm about the rapid spread of the pandemic and how it has paralysed parts of the global economy and squeezed company revenue

Reuters March 17, 2020 04:05:39 IST
Wall Street deepens historic slump as virus response comes up short

Wall Street deepens historic slump as virus response comes up short

By Caroline Valetkevitch

NEW YORK (Reuters) - Wall Street suffered its biggest drop since 1987 on Monday, with the S&P 500 closing at its lowest level since December 2018, as investors fear the coronavirus pandemic is proving a tougher opponent than central banks, lawmakers or the White House are currently capable of battling.

The S&P 500 tumbled 12%, its biggest drop since "Black Monday" three decades ago, despite the Federal Reserve's surprise move late Sunday to cut interest rates to near zero, its second emergency interest rate cut in less than two weeks and ahead of its scheduled policy meeting on Tuesday and Wednesday.

That added to alarm about the rapid spread of the pandemic and how it has paralysed parts of the global economy and squeezed company revenue.

Stocks fell further late in the session as President Donald Trump urged Americans to halt most social activities for 15 days and not congregate in groups larger than 10 people, in a newly aggressive effort to reduce the spread of the coronavirus in the United States.

"It's a market adrift with nothing to hold on to. There's nothing that can really give us a sense of when the full extent of the virus' impact will be known," said Jeffrey Kleintop, chief global investment strategist at Charles Schwab.

Trump also warned that a recession was possible.

Most market watchers at this point are bracing for the likelihood that the economy is headed for a recession, but they said it is too early to know the full extent of the economic downturn.

Investors may be expecting a fairly deep recession but are just not sure how long it's going to last, Kleintop said.

The Dow Jones Industrial Average <.DJI> fell 2,997.1 points, or 12.93%, to 20,188.52, the S&P 500 <.SPX> lost 324.89 points, or 11.98%, to 2,386.13 and the Nasdaq Composite <.IXIC> dropped 970.28 points, or 12.32%, to 6,904.59.

Trading on Wall Street's three main stock indexes was halted for 15 minutes shortly after the open as the S&P 500 index <.SPX> plunged 8%, crossing the 7% threshold that triggers an automatic cutout.

The real estate sector <.SPLRCR> was the weakest out of the S&P 500's 11 major sectors with a 16.5% dive, which was its deepest one-day percentage drop since 2009. The smallest loser was consumer staples <.SPLRCS> which sank 7% on the day.

The technology sector <.SPLRCT> fell 13.9%, which was a record one-day decline for the sector that was the biggest driver of the bull market.

(Additional reporting by Sanjana Shivdas in Bengaluru and Thyagaraju Adinarayan; Editing by Dan Grebler and Nick Zieminski)

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

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.