It’s another rout on Wall Street, with losses intensifying into Monday’s close.
The coronavirus continues, and the Federal Reserve said Sunday evening it is slashing interest rates to near-zero and reinstating its bond-buying program. The efforts, an attempt to keep the engines of the financial system running, were instead interpreted by traders as a sign of desperation, or at least, an indication that things are worse than they had thought.
Speaking in the afternoon, President Donald Trump and members of the White House’s coronavirus task force asked all Americans to avoid discretionary travel, to not hold gatherings of over 10 people, to not eat at restaurants or bars, and to quarantine themselves if they or a member of their household feels sick. The measures follow similar recommendations made by several states and local governments in recent days.
The Dow Jones Industrial Average opened with a loss of 9.7%, or 2,250.46 points, leaving it at 20,935.16. The S&P 500 dropped 8.1% and the Nasdaq Composite fell 6.1%. The drop immediately triggered a 15-minute trading halt for the third time since last Monday.
Stocks later regained some ground. But by the close, the Dow was back down 2,999.14 points, or 12.9%, the S&P 500 had lost 12%, and the Nasdaq was off 12.3%. The next circuit breaker would have been triggered by a 13% decline in the S&P 500.
Financials were among the hardest-hit sector in the S&P 500, down over 12%. Consumer staples were the relative winner, off 5%.
Oil plunged more than 8%, with the price of West Texas Intermediate, or WTI, falling below $30 a barrel. S&P 500 energy stocks lost almost 13%.
The Stoxx Europe 600, which fell 18% last week, closed down 4.9%.
In Asia, Australia’s S&P/ASX 100 fell close to 10%, while the Nikkei 225 fell more than 2% in Tokyo.
The yield on the 10-year Treasury fell 22 basis points, or hundredths of a percentage point, to 0.728%. The price of gold slipped 0.6%.
It has been an immensely volatile stretch for the market. The S&P 500’s last five daily moves are -7.6%, +4.9%, -4.9%, -9.5%, +9.3%—and now Monday’s near double-digit drop. The Cboe Volatility Index, or VIX, jumped 42%, to over 82. It is an extremely elevated level for the VIX, which measures expectations of future volatility based on index options pricing.
The selling comes as the number of Italian Covid-19 cases surged. The U.S. expanded a travel ban to the U.K. and Ireland, Germany announced it was partially closing its borders, France closed its famous cafes and restaurants, and the Netherlands ordered its weed-selling coffee shops to close.
In the sea of red, it is little surprise that individual stocks were also plunging.
Apple (AAPL) closed down 12.9%, due in part to being slapped with a $1.3 billion fine over anticompetitive sales practices. The iPhone maker also said it was closing stores outside of China amid the coronavirus.
JPMorgan Chase (JPM) shares plunged 15%. JPMorgan was one of eight banks that announced on Sunday that they were halting buybacks so that they can continue lending to businesses and individuals harmed by the coronavirus pandemic.
Other banks in the group include Goldman Sachs Group (GS), down 12.7%; Morgan Stanley (MS), down 15.6%; Citigroup (C), off 19.3%; Bank of America (BAC), off 15.4%; Wells Fargo (WFC), 14.3% lower; State Street (STT), down 18.9%; and Bank of New York Mellon (BK), off 14.5%.
Airline stocks rose after president Trump suggested that funding help could be on the table for the beleaguered industry. American Airlines Group (AAL) shares rose 11.3% after suspending 75% of its long-haul international flights as demand weakens and travel bans grow amid the coronavirus pandemic. Shares of Delta Air Lines (DAL) and United Airlines (UAL) closed down 6.7% and 14.8%, respectively.
—Steve Goldstein contributed to this article.
Source: Barrons: Dow Plunges 3,000 Points in Worst Selloff Since 1987