Chronicle Editor
The S&P 500 tumbled 8% at opening on yesterday, triggering an automatic 15-minute halt of Wall Street’s three main indexes for the third time in six days, as traders reacted to drastic weekend measures from the Federal Reserve to stave off a global recession.
The second emergency cut in interest rates by the U.S. central bank in a fortnight only added to the sense of panic among investors, worried that the coronavirus pandemic is paralysing supply chains and squeezing company finances.
Latest economic figures from China earlier on Monday showed factory data plunging at its sharpest pace in three decades, underscoring the damage on the world’s second biggest economy.
At 9:30 a.m. ET the Dow Jones Industrial Average .DJI was down 2,250.46 points, or 9.71%, at 20,935.16, the S&P 500 .SPX was down 220.55 points, or 8.14%, at 2,490.47 and the Nasdaq Composite .IXIC was down 482.15 points, or 6.12%, at 7,392.73.
If the S&P 500 falls 13% once trading resumes, it will trigger a level-2 circuit breaker and halt trading again for 15 minutes.
Bars, restaurants, theaters and cinemas were shutting down in New York, Los Angeles and other global cities to combat the coronavirus pandemic as countries tightened borders and central banks acted aggressively to cushion the economic impact.
The U.S. Federal Reserve cut interest rates, for the second time in less than two weeks, to near zero and other central banks followed suit, but stock markets and the dollar continued to tumble.
European stocks fell yesterday to their lowest level since 2012, with investors still worried about the threat to the global economy, and Wall Street futures for the S&P 500 index hit their down limit, suggesting Wall Street was set to follow suit.
“Many children think it is scary,” Norwegian Prime Minister Erna Solberg told a news conference, at her office, dedicated to answering children’s questions about the pandemic.
“It is okay to be scared when so many things happen at the same time.”
Brent fell by 10% yesterday, and U.S. crude to below $30, as emergency rate cuts by the U.S. Federal Reserve and its global counterparts failed to tame markets and China’s factory output plunged at the sharpest pace in 30 years amid the spread of coronavirus.
Brent crude LCOc1 was down $3.58, or 10.6%, to $30.27 a barrel by 1231 GMT. The front-month price had risen $1 earlier in the session.
U.S. West Texas Intermediate (WTI) crude CLc1 was at $29.24, down $2.49 or 7.8%.
To combat the economic fallout of the pandemic, the Fed on Sunday cut its key rate to near zero, triggering an unscheduled easing by the Reserve Bank of New Zealand to a record low as markets in Asia opened for trading this week.
The Bank of Japan later stepped in by easing monetary policy further, and Gulf central banks also cut interest rates. However, the measures failed to calm the investors, and stock markets weakened again.-Reuters.
Online Reporter