Yahoo Finance

Stock market news live: Coronavirus jitters send Dow swooning to worst-ever point loss, closes at near 3-year low

Emily McCormick and Javier E. David
Updated 19 min read

In This Article:

[Click here to read what’s moving markets Tuesday, March 17]

Stocks cratered on Monday, with the Dow Jones Industrial Average suffering its worst-ever loss on a point basis, as new developments in the coronavirus pandemic prompted Wall Street to prepare for the growing possibility of a deep recession amid a prolonged shutdown of public life.

The Dow dived by 2,997 points, or 12.93%, and tumbled to 20,188.52, closing at its lowest level since May 2017 after President Donald Trump warned the crisis may drag on well into the summer months. The sell-off represented the index’s biggest percentage decline since the “Black Monday” crash of 1987 — and the 2nd worst in its 100-plus year history — as well as its largest point decline on record.

Amid a day of heavy selling in which benchmarks tripped “circuit breakers” at the opening bell meant to curb losses, the S&P 500 and Nasdaq also posted steep losses, falling by 11.98% and 12.32%, respectively. The Nasdaq’s percentage decline was the worst on record, back to its creation in 1971.

Federal Reserve rescue no help

Stock futures had opened sharply lower Sunday evening, even after the Federal Reserve launched a massive monetary stimulus program that included cutting rates to effectively zero, and unveiling plans for large-scale asset purchases.

However, stock futures immediately indicated that Wall Street was in for a rough session, plunging to their “limit-down” levels established by CME Group daily to prevent further extreme losses. Each dropped more than 4%, with markets surmising that the coronavirus crisis would get worse before it got better.

“The Fed did what it had to do to ease financial conditions, but that's not going to change the trajectory of the economy,” said Eric Stein, co-director of global income at Eaton Vance Management.

“We are living in unprecedented historical times with the economy basically in shutdown mode,” he added. “Hopefully, at the margin, the central bank's liquidity injection can help dollar funding markets now.”

Specifically, the Fed slashed benchmark interest rates rates by 100 basis points to a band of between 0% and 0.25%. Underscoring the growing fears of a worldwide recession, the surprise announcement came just days ahead of the Fed’s scheduled March monetary policy meeting on Tuesday and Wednesday — and less than two weeks after the Fed had also unexpectedly cut rates by 50 basis points to a range of 1.00-1.25%.

Many market participants had expected the Fed would vote to cut rates to a zero lower bound for the first time since the financial crisis, but anticipated it would happen at this week’s meeting.

and

Recommended Stories