NEW YORK ( AP) — The stock market had its biggest drop since the Black Monday crash of 1987 as fears of economic fallout from the coronavirus crisis deepened. The Dow industrials plunged more than 2,300 points, or 10%. The sell-of came despite action from the Federal Reserve and the European Central Bank.
The steep drops over the last month have wiped out most of the big run-up on Wall Street since President Donald Trump’s inauguration. Markets have turned turbulent amid a cascade of shutdowns across the globe and rising worries that the White House and other authorities around the world can’t or won’t help the weakening economy any time soon.
The deepening coronavirus crisis sent stocks into another alarming slide Thursday, extending a sell-off that has wiped out most of the big run-up on Wall Street since President Donald Trump’s inauguration.
The Dow Jones Industrial Average was down more than 2,000 points, or 8.7%, in late afternoon trading. The broader S&P 500 was off 8.4% and set to fall into a bear market by the close of trading, ending the longest bull market in Wall Street history — nearly 11 years.
European markets lost 12% in one of their worst days ever, even after the European Central Bank pledged to buy more bonds and offer more help for the economy.
The heavy losses came amid a cascade of cancellations and shutdowns across the globe — including Trump’s suspension of most travel to the U.S. from Europe — and rising worries that the White House and other authorities around the world can’t or won’t counter the economic damage from the coronavirus pandemic any time soon.
“The news just continues to get worse, and the travel ban puts an exclamation point on the weakness we’re going to see in global GDP and, in turn, the U.S.,“ said Liz Ann Sonders, chief investment strategist at Charles Schwab. “We’re starting to get a sense of how dire the impact on the economy is going to be. Each day the news doesn’t get better, it gets worse. It’s now has hit Main Street to a more significant degree.”
Stocks fell so fast on Wall Street at the opening bell that they triggered an automatic, 15-minute trading halt for the second time this week. The so-called circuit breakers were first adopted after the 1987 crash, and until this week hadn’t been tripped since 1997.
The Dow briefly turned upward and halved its losses at one point in the afternoon after the Federal Reserve announced it would step in to ease “highly unusual disruptions” in the Treasury market. But the burst of momentum quickly faded.
Trump often points proudly to the big rise on Wall Street under his administration and warned a crowd at a rally last August that “whether you love me or hate, you gotta vote for me,“ or else your 401(k) will go “down the tubes.”
Just last month, the Dow was boasting a nearly 50% gain since Trump took the oath of office on Jan. 20, 2017. By midafternoon Thursday, the Dow was clinging to an 8% gain, though it was still up 17.3% since just before Trump’s election in November 2016.
On Wednesday, the Dow finished the day down more than 20% from its all-time high, set just last month, officially entering what is known as a bear market for the first time in over a decade. The S&P 500 was likewise in danger of finishing the day Thursday in bear market territory.
The combined health and financial crisis heightened fears of a recession.
“This is bad. The worst and fastest stock market correction in our career,“ Chris Rupkey, chief financial economist at MUFG Union, said in a research note overnight. “The economy is doomed to recession if the country stops working and takes the next 30 days off. The stock market knows it.”
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NEW YORK (AP) — An early plunge of 7% on Wall Street Thursday triggered a trading halt as a sell-off slamming global markets continued. The Dow Jones industrials dropped more than 1,600 points, or 7%, the S&P 500 fell a similar amount.
Trading resumed after 15 minutes, approximately 8:50a.m. CDT.
The rout came after President Trump imposed a travel ban on most of Europe and offered few new measures to contain the economic impact of the coronavirus outbreak.
Benchmarks in Europe fell more than 7% even after the European Central Bank announced more stimulus measures. World markets are enduring violent swings amid uncertainty about how badly the outbreak will hit the economy.