Live updates: Dow plunges 2,100 points as Fed's emergency actions fail to calm worries over coronavirus fallout
Richard Drew/AP
- US stocks fell sharply on Monday as investors appear to shrug off the Fed's emergency actions Sunday amid the coronavirus pandemic.
- The S&P 500 plummeted 8.1% at the open, triggering a 15-minute market-wide trading halt. The Dow Jones Industrial Average slipped 9.7%, or 2,250 points, within the first minute.
- Selling pressure persisted once trading resumed, with all major US indexes down more than 8% at 3:05 p.m. ET.
- The Federal Reserve on Sunday cut its benchmark interest rate to near zero and said that it will increase bond holdings by $700 billion, among other measures.
- "Even if the Fed is able to put a floor under markets, asset prices are unlikely to begin recovering until coronavirus spread plateaus," Seema Shah, chief strategist at Principal Global Investors, told Business Insider.
- Read more on Business Insider.
US stocks fell sharply on Monday amid continued worry over the sweeping economic impact of the coronavirus pandemic.
The S&P 500 dropped 8.1% within a minute, triggering a 15-minute market-wide trading halt. The Dow Jones Industrial Average slipped 9.7%, or 2,250 points, before the stoppage occurred. US indexes have pared those losses slightly but still remain down more than 8%.
In overnight trading, futures on the S&P 500 hit a so-called limit down circuit breaker, which prevents declines of more than roughly 5%.
The market's negative reaction suggests traders aren't convinced the stimulus efforts announced by the Federal Reserve on Sunday will be enough to offset the negative economic impact of the coronavirus outbreak. Investors have been faced with an increasingly uncertain landscape as virus cases have spiked and much of the nation has gone into lockdown.
Here's where major US indexes were trading as of 3:05 p.m. ET:
- S&P 500: 2,481.45, down 8.5%
- Dow Jones Industrial Average: 21,041.80, down 9.3% (2,144 points)
- Nasdaq Composite: 7,189.69, down 8.7%
The actions taken by the Fed on Sunday included cutting its benchmark interest rate to near zero. The central bank also said that it will increase bond holdings by $700 billion and reduce reserve ratio requirement ratios to 0%. Other central banks around the world responded with similar actions.
"The Fed has thrown most its weight behind this move, offering almost everything it has to give, which raises the inevitable question – if this doesn't work, what will?" Seema Shah, chief strategist at Principal Global Investors, said to Business Insider.
She added: "Even if the Fed is able to put a floor under markets, asset prices are unlikely to begin recovering until coronavirus spread plateaus."
Scroll down to read Markets Insider's coverage of coronavirus-driven market madness:
One expert says Tesla's stock is still expensive, despite plummeting 40% amid the coronavirus market sell-off
FREDERIC J. BROWN/AFP via Getty Images
Even though Tesla shares have sold off sharply from their all-time high close in February, Bernstein thinks they're still too high.
Shares of Tesla were down roughly 40% from February's high of $917 per share through Friday, when the stock closed around $547 per share. On Monday, the Elon Musk-led automaker's stock shed another almost 15% amid a broader coronavirus-induced market sell-off as investors shrugged off the Fed's Sunday emergency actions.
Read the full story here.
Treasury Secretary Mnuchin doesn't see the US falling into recession — and says 'pent-up demand' will boost the post-coronavirus economy
Associated Press
An economic rebound will keep the US from sliding into a coronavirus-sourced recession, Treasury Secretary Steven Mnuchin said.
The outbreak has already forced the closure of restaurants, theaters, and entertainment venues in some of the country's biggest cities, cutting out swaths of expected economic activity. Major banks including JPMorgan and Goldman Sachs have officially projected near-term economic recession as the virus places pressure on both supply and demand.
Read the full story here.
'A mixed message for the market': What Wall Street is saying about the Fed's decision to slash rates to near zero
AP Photo/Pablo Martinez Monsivais
The Federal Reserve made a second emergency cut to borrowing costs on Sunday evening as concerns about the coronavirus pandemic rose. Its action brought interest rates to near zero in a move that has not been seen since the depths of the global financial crisis.
But financial markets fell sharply following the aggressive cut, which was accompanied by the launch of a $700 billion round of asset purchases, called quantitative easing. Here's what Wall Street is saying about interest rate levels, quantitative easing, future policy moves, and global implications.
Read the full story here.
See the rest of the story at Business Insider
See Also:
- Famed economist David Rosenberg called the housing bubble. Now he tells us why the oil-price war will be more damaging than the coronavirus — and outlines a scenario where stocks plunge another 13%.
- JPMorgan has developed an AI tool to measure how the coronavirus is damaging markets — and its findings suggest the plunge is nowhere near finished
- GOLDMAN SACHS: These 15 stocks are plunging as coronavirus rocks markets, but their powerful long-term growth could make them bargains to buy right now