HomeWall Street falls sharply as rampant volatility takes hold amid coronavirus fearsTechWall Street falls sharply as rampant volatility takes hold amid coronavirus fears

Wall Street falls sharply as rampant volatility takes hold amid coronavirus fears

“Stocks are crashing, commodities are crashing and oil prices are crashing,” said Chris Brightman of Research Affiliates. “Bonds and gold are down too in the dash for cash. Levered hedge funds need cash to meet margin calls. Banks need cash to meet demands from companies drawing down credit lines. Fear has gripped markets.”

Nothing was spared. Oil prices looked like they were reliving the 1970s, dropping 24 percent to near $20 per barrel for the commodity’s third-biggest rout in history. All 11 Standard & Poor’s sectors were in the red. The day’s poorest performers were in the travel and tourism sphere: Marriott down 15 percent. United Airlines, 30 percent. American Airlines, 25 percent. MGM Resorts, 25 percent. Wynn Resorts, 21 percent. t.

“The lamps are going out all across the economy,” JP Morgan Chase said in a report that forecasts a massive, 14 percent decline in gross domestic product in the second quarter.

Boeing, once the showcase of the bull market, saw its stock hanging just above $100 per share, a quarter of its peak a year ago. Trump has pledged federal aid for the wheezing aerospace giant.

“If 2008 was the Great Financial Crisis, this is the Great Virus Crisis,” said Ed Yardeni, president of Yardeni Research. “It’s all at once a health crisis, financial crisis and economic crisis. We need to fix the health part of it before we have it solved, but we can take financial and fiscal steps to blunt its effects. We are starting to do that now.”

All three major U.S. stock indexes are in a correction, having declined beyond 20 percent from their highs.

The Dow Jones industrial average fell more than 1,334 points, about 6.3 percent, on Wednesday. The blue-chip index had plunged 2,300 points at its bottom, but clawed back in the last hour to post a closing number of 19,898. The last time the Dow closed below 20,000 was Groundhog Day, Feb. 2, 2017.

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The Standard & Poor’s 500 index, which Thursday will mark one month since its all-time high, fell nearly 5.2 percent. The broad index triggered a halt in trading earlier in the day after a 7 percent decline. After trading resumed, markets plunged White House plans to bail out embattled industries and cut checks to Americans failed to quell investor fears about the devastating economic impact of the coronavirus. The tech-heavy Nasdaq sank 4.7 percent.

Investor Bill Ackman didn’t help. In a telephone interview with CNBC Wednesday afternoon, Ackman proclaimed “America ill end as we know it” if the crisis is not resolved. Markets dropped even more after his emotional please.

In early trading, futures sank more than 5 percent, triggering the New York Stock Exchange’s “limit down” threshold which caps projections to prevent emotional and chaotic trading at open. The Dow Jones industrial average plunged more than 1,300 points at the opening bell, and after another “circuit-breaker” pause had extended its losses to more than 2,050 points, or 9.8 percent.

The Dow marked its eighth straight day of 1,000-point swings, which was considered unthinkable until recently. Stocks are moving on every news conference, financial proposal,headline and medical utterance. The blue chips closed up more than 1,000 points Tuesday off news of a $1 trillion stimulus proposal from the White House.

The declines have continued despite extreme government intervention aimed at cushioning the economy against a coronavirus-fueled recession. The Federal Reserve began the week by slashing interest rates to near zero and reviving a financial crisis-era “quantitative easing program,” and on Tuesday the central bank announced plans for a special fund to keep credit flowing during the coronavirus outbreak.

Treasury Secretary Steven Mnuchin announced that the White House was looking at giving direct cash payments to Americans as part of an $850 billion stimulus package, which the administration hopes will stanch the economic free fall caused by the coronavirus. President Trump initially supported a payroll tax holiday but said Tuesday that it would take too long to deliver relief to Americans.

European markets also tanked Wednesday as governments introduced sweeping, blank-check stimulus moves to prop up their economies, with the benchmark Stoxx 600 index closing down more than 4 percent as oil and gas stocks plunged. Germany, Spain and the United Kingdom have hurled hundreds of billions in rescue package funding at the virus. French President Emmanuel Macron went so far as to promise that no French company will be allowed to fail because of the coronavirus impact, saying the government would provide assistance through loans, delayed tax payments or even nationalize industries to keep them afloat.

“People are panicked,” said Nancy Tengler of Tengler Wealth Management. “If there’s too much stimulus, then the market take is things must be really bad. And if there’s not enough, then there’s no leadership. People are worst-case-scenario-ing it.”

On Tuesday, all 50 states had confirmed cases of the virus, while the number of confirmed cases worldwide crept past 200,000.

Industries that have been hit hardest by the outbreak, such as airlines, casinos and hotels, are lobbying for government assistance. The United States is expected to lose 4.6 million travel-related jobs this year as the coronavirus outbreak levies an $809 billion blow to the economy, according to startling projections released Tuesday by the U.S. Travel Association. 4 million jobs have been eliminated already or are on the verge of being lost in the next few weeks, the American Hotel & Lodging Association said.

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