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Wall Street clobbered as crude plummets, virus crisis deepens

Stock Markets Mar 09, 2020 04:34PM ET
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By Stephen Culp

NEW YORK (Reuters) - Wall Street suffered its biggest one-day loss since the 2008 financial crisis on Monday and recession worries loomed large as tumbling oil prices and ongoing coronavirus fears prompted investor panic on the anniversary of the U.S. stock market's longest-ever bull run.

All three major U.S. stock averages plunged sharply at the opening bell, triggering trading halts put in place in the wake of 1987's "Black Monday" crash. The Dow plummeted a record 2,000 out of the starting gate on the day marking the current bull market's 11th year.

During the session, the Dow came about a 10th of a percent from confirming a bear market, or 20% below its record peak.

The S&P 500 closed about 19% below its all-time high set on Feb. 19.

"It's certainly one for the history books," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "The markets are now pricing in a high probability of recession."

Peter Cardillo, chief market economist at Spartan Capital Securities in New York, agreed.

"There's a lot of fear in the market and if the price of oil continues to move lower it's an indication that a global recession is not far away," Cardillo said.

The CBOE Volatility index (VIX), a gauge of investor anxiety, touched its highest level since December 2008.

Benchmark 10-year U.S. Treasury yields briefly sank to 0.318%, a record low.

The sell-off began over the weekend when an oil supply pact between Saudi Arabia and Russia collapsed and both countries vowed to hike production amid weakening global demand due to the coronavirus and signs of an economic slowdown.

Oil prices crashed to their lowest since the 1991 Gulf war, with Brent crude futures (LCOc1) closing down 23.88% and front-month WTI falling 25.1%, sending the S&P Energy index (SPNY) sliding 20.1%, its largest one-day drop on record.

Global markets were already on edge as worldwide confirmed cases of COVID-19 surged past 110,000, causing widespread supply disruption and large-scale quarantine measures as governments scramble to contain the outbreak.

The Dow Jones Industrial Average (DJI) fell 2,013.76 points, or 7.79%, to 23,851.02, the S&P 500 (SPX) lost 225.81 points, or 7.60%, to 2,746.56 and the Nasdaq Composite (IXIC) dropped 624.94 points, or 7.29%, to 7,950.68.

All 11 major sectors of S&P 500 ended the session deep in red territory, with energy and interest rate-sensitive financial (SPSY) stocks suffering the largest percentage losses.

Boeing Co (N:BA) was the biggest drag on the Dow, tumbling 13.4% following the Federal Aviation Administration's (FAA) rejection of the planemaker's proposal regarding wiring systems in place on its grounded 737 MAX aircraft.

Apple Inc (O:AAPL) shares fell 7.9% after data showed the company sold fewer than 500,000 smartphones in China in February amid the coronavirus crisis.

Chipmakers registered their largest drop since October 2008, with the Philadelphia SE Semiconductor index (SOX) falling 8.3%.

Declining issues outnumbered advancing ones on the NYSE by a 17.86-to-1 ratio; on Nasdaq, a 19.11-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and 229 new lows; the Nasdaq Composite recorded nine new highs and 1,049 new lows.

Volume on U.S. exchanges was 17.22 billion shares, compared with the 11.05 billion average over the last 20 trading days.

(GRAPHIC: S&P energy relative to S&P 500 vs crude - https://fingfx.thomsonreuters.com/gfx/mkt/13/1608/1583/Pasted%20Image.jpg)

Wall Street clobbered as crude plummets, virus crisis deepens
 

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Comments (32)
Azam Khan
Azam Khan Mar 09, 2020 5:43PM ET
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Just explain me why coronovirus news is so much hyped now we have to think how we can save ourselves from it rather than thinking that corona virus is end of the world now we have to live with it and secure ourself
juan david agudelo alvarez
juan david agudelo alvarez Mar 09, 2020 2:12PM ET
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the bubble bursting at last
John Mars
John Mars Mar 09, 2020 1:27PM ET
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This is what happens when the Fed pu.ps billions into the financial markets to help prop it up. It was no secret, it had been going since September 2018. ...and people are surprised it comes down?
John Mars
John Mars Mar 09, 2020 1:27PM ET
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But let's blame the media and a virus that is happening but expect the media not to report on it.
David David
David9 Mar 09, 2020 1:10PM ET
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I blamed this in the Fake Media... they kept pumping non stop panic headlines.
Stanislav Angelov
Stanislav Angelov Mar 09, 2020 1:10PM ET
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Even though many were hit hard we can draw some conclusions and adjust our portfolios. Also low prices give good buying opportunities.
John Klan
John Klan Mar 09, 2020 12:46PM ET
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Weak hands and panic sellers....I want your shares. I've been saving g up for this correction for over a year. Thanks
John Klan
John Klan Mar 09, 2020 12:34PM ET
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one more dip today when margin selling begins and then I think we gain a lot back into the close.
Ed Nelson
Ed Nelson Mar 09, 2020 12:34PM ET
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Hope you didn't actually bet on that. Personally, I'm waiting for Dow @ 12,000 while I ignore the occasional upward movements along its way down. Maybe, I'll begin to jump in a little at 14,000 and continue to buy as it declines further. BTW, someone please tell Popovich to GFH with his misinformation and whining. Obama waited until a thousand died before starting up the H1N1 test kits. Trump moved to start Corona kits after only 25 died. Haters gonna hate.
Dan Chan
Dan Chan Mar 09, 2020 12:25PM ET
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time for America bankrupt...
Naim Fateh
Naim Mar 09, 2020 12:25PM ET
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America the biggest financial manipulator not China.
Damian Ciceri
Damian Ciceri Mar 09, 2020 12:22PM ET
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these are the moments that investors get rich. buy the dips, accumulate your position and be grateful for these pullback opportunities. DCA the dips and load the boat once we clear-5
Damian Ciceri
Damian Ciceri Mar 09, 2020 12:22PM ET
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once we clear -35 percent
Beny Muler
Beny Muler Mar 09, 2020 12:22PM ET
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exactly get what u can and wait it grow back again
Nela Kordich
Nela Kordich Mar 09, 2020 12:22PM ET
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Im a novice -35? Referring to RSI? Why minus sign?
Thom Miller
Thom Miller Mar 09, 2020 12:15PM ET
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But my president promised this was a hoax and that no US citizens had died. He also said the virus was contained and Mike Pence would fix everything. What happened? I know he wouldn’t lie to us.....
paul wong
paul wong Mar 09, 2020 12:15PM ET
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if you wanna truth, go listen to the Chinese Communists
Oskar Rådström
Oskar Rådström Mar 09, 2020 12:11PM ET
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What should we expect at the moment? Pullback to about 25200 then massive drop?
 
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