US Market tumbles 13% as coronavirus collapse continues

The US equity market finished session steep lower on Monday, 16 March 2020, amid deepening concerns over economic impact of coronavirus on the world's largest-largest economy after a second emergency rate cut by the U.S. Federal Reserve and after President Trump warned that disruption from the coronavirus pandemic could last through August and issued new public health guidance. At closing bell, the Dow Jones Industrial Average tanked 2,997.10 points, or 12.93%, to 20,188.52, while the S&P 500 index retreated 324.89 points, or 11.98%, to 2,386.13. The Nasdaq Composite Index tumbled 970.28 points, or 12.32%, to 6,904.59.

Monday's losses put the Dow down 31.7% from its all-time high and the S&P 500 and Nasdaq more than 29% below their records last month. The Dow fell to its lowest point since 2017.

 

Selling was so extreme that trading on the New York Stock Exchange was halted for 15 minutes. It was the third time such a circuit breaker was triggered in the past week.

Investors fled stocks, despite the Federal Reserve's move Sunday night to cut interest rates to near zero and to begin purchasing $700 billion worth of Treasury bonds and mortgage-backed securities in a bid to calm jittery markets. Investors welcomed the Fed's actions, but said the central bank needed to do more and do it quickly.

However, news about the coronavirus outbreak did not help sentiment. U.S. cases have jumped to 3,774 and 69 deaths, according to Johns Hopkins University. The Centers for Disease Control and Prevention urged organizers to cancel or postpone events with more than 50 people. New York, New Jersey and Connecticut governors banned eating in restaurants and limited events to less than 50 people.

Bank stocks took a hit, with Bank of America and JPMorgan Chase each dropping more than 14%. Morgan Stanley fell 15.6% while Citigroup dropped 19.3%. The big banks announced Sunday they were halting their buyback programs in an effort to provide capital where needed.

Airline came off their lows after reports suggesting the White House is preparing a tax break for consumers and a bailout for the airlines industry. Delta shares closed just 6.7% lower after falling more than 10%. American Airlines was up more than 10% after plunging earlier in the day.

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