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Stocks - Dow's Worst Loss Since '87 Crash; Fed Bazooka Fails to Halt Bears

Published 03/12/2020, 03:43 PM
Updated 03/12/2020, 04:07 PM
© Reuters.

© Reuters.

By Yasin Ebrahim 

Investing.com – The Dow plunged to its biggest-one day percentage loss since October 1987 as fears the spread of the novel coronavirus will pick up pace and usher in a global recession overshadowed the Federal Reserve's bold new stimulus measures to calm funding markets.

The Dow Jones Industrial Average fell nearly 10%, or 2,352 points, it worst one-day percentage drop since Black Monday when it lost 22.6%. It was the fourth-largest percentage drop for the blue chip index in history, rivaling those seen in 1929.

The S&P 500 plunged 9.5% and the Nasdaq Composite slumped 9.4%.

The rout on Wall Street for the second-straight day comes as investors upped their bearish bets on stocks despite the Federal Reserve unveiling $1.5 trillion in fresh liquidity to combat "temporary disruptions" in funding markets.

The short-term pause in selling following the Fed announcement proved short-lived as investor sentiment on stocks continued to be swayed by the latest updates on the spread of the coronavirus, or Covid-19, which has killed nearly 5,000 people, with infections topping 133,000 worldwide.

In the U.S., where infections are feared to increase in the coming weeks, state-wide bans on large gatherings to limit the virus impact continued, with New York announcing announce a ban on gatherings of 500 or more people.

Against the backdrop of rising infections in the U.S., Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told a House committee he was "hopeful" the first trial patient will receive a coronavirus vaccine in a few weeks rather than in two to three months, as had been initially anticipated.

The sea of red on Wall Street was led by a slump in energy as concerns over demand  - as a result of the virus –  were exacerbated after President Donald Trump revealed a travel ban for non-citizens and non-residents from 26 European countries - excluding the U.K and Ireland - into the U.S.

"Instead of instilling confidence, based on the market reaction afterwards, [the speech] had the opposite effect," said Phil Flynn at Price Futures in Chicago. "The talk of an EU travel ban was a blow for energy demand that is already grappling with the double assault of a Saudi Arabia versus Russia price war as well as concern for more coronavirus drop in demand."

Travel and airline also fell heavily, with Norwegian Cruise Line (NYSE:NCLH) down 36% and Carnival (NYSE:CCL) down 31%. American Airlines (NASDAQ:AAL) slumped 17.7% and United Airlines (NASDAQ:UAL) fell 25%. 

In tech, FANG stocks came under heavy pressure, with Facebook (NASDAQ:FB), Netflix (NASDAQ:NFLX) falling more than 9%, and Google and Amazon (NASDAQ:AMZN) down about 8%. Among the big tech stocks, however, Facebook has been touted as the best bet to weather the storm, according to MKM Partners. But Google (NASDAQ:GOOGL)'s exposure to travel-related ads, however, makes the search-engine giant the most vulnerable to downside pressures, as travel demand has soured in the wake of the coronavirus outbreak, which has seen governments restrict travel.


 

Latest comments

All this commotion about the flu, jeez!
President Trump needs to close the equity markets for two weeks or more till the panic subsides.
Kim Jung Trump better not Close the markets. A barometer of market value and strength have always been the cornerstone of American capitalism...good or bad. we don't hide by skewing that barometer, we've made ...or our President has made bad decisions. Minimizing damage and sentiment could have prepared US weeks ago. He could have gotten his way by acting sooner and his markets would have followed. Instead he sat on his tiny *** breathig Hepa cleaned air in his White house bunkered office, whining about hoaxes, flus, unfairness, media.and the dilemmas of affluenza while the world watched their elders drown in their own fluids. The markets should certainly be reflected in sentiment Americans feel.
Markets are reacting to Lagging government responses and rightfully so. Or maybe we should consider that government no longer serves its people. or maybe we should believe no government will ever be prepared for the crisis we're in today. Usher in the NWO to remedy all our concerns.
NASDAQ still grossly overpriced at 7000
NASDAQ is still grossly overpriced at 7000, during the middle of this last bull run it was exclaimed that the NASDAQ would never, I repeat NEVER get back to or exceed the 5000+ range set during the dot com bubble. it was an impossibility. 2000 more to go to get just there let alone wherever fair value lies.
I think Dow coming at 14000 levels next week.it's a horrible.
The worst collapse I ever seen! :-(
Would like to thank China for ruining all our NCAA tournaments so many seniors got their senior year destroyed today.
your welcome
*you're
Wait for the credit market collapse. This will look very minor. How will all this debt be paid if there is no work.
DT is a lunitic
Trump just embarrassed himself to Chinese. Never look down when ppl need help. So weak when handling crisis and now nobody want to help u out. Is payback time.
People are overly panicked. only a handful have died but you're all acting like it's the end times
Do you want to get the virus and potentially *****up your insides?
Trump taught us a life lesson... when others are weak, don't laugh at them, cause things can change quickly within weeks. Now US stock market erases all the gain of 2019 in just days.
2019? today it closed to level same as Jan 07, 2017. So erased 3 year of gains
so it's about money?
When a vaccine is on the market will be a rebound in Wall Street and the pharmaceutical stocks rise to the heaven.
Most companies are leverages and US economy is going to shutdown. nobody knows for how long along with European economy . US will lose about 15-25% of it's GDP , curfews, no flights,no leagues,no businesses  but FED makes sure all speculators and banks have enough funds to play with but forgets to support the real economy.
Maybe you are seeing too gloomy scenarios which may not happen
This is a health crisis, but the administration is treating stock market. This is why this doesn't work!! Ignorant, Incompetent, and Insane!!!
Health Crisis of coronavirus has no real proper treatment from the best doctors,scientists worldwide ,better to shut off other fires,or it will be worser
I am taking about health crisis, not the disease, they are different things.
More worser
Dna
Does everyone realize that we are breaking records every other day? Soon the markets will go down an average of 10% each day. That's what we get when we put a fake president in the oval office. The WH is not even trying to deal with the crisis. Trump is only trying to stop the bleeding in the markets when we all care about our health first. I don't care if the market crashes tomorrow as long as we can all make alive from the current pandemic.
Yes we have to save lives as it is more important,not worry enough financed bulls,who are just waiting few weeks to get market to the highs of 1 month back,unfortunately no doctors to cure the more infected ,vulnerable victims worldwide,(who according to rich who will never be affectedare callous enough not to bother if they were dead ,alive,suffering are not factors of stock market and moey making)
I'm not surprised by this. The Bible says: "At the appointed time [the king of the north] will return back." (Daniel 11:29a) The return of Russia in this context means crisis, which will eclipse the Great Depression. Not only the eurozone will break up, but also the European Union and NATO. Many countries of the former Eastern block will return to a military alliance with Russia.
bye bye traitor trump. Joe has prematurely been installed as president. federal agencies have begin taking his orders and traitor trump is being prepared for quarantine
We should put his twitter account in quarantine for two weeks. Oh, I wonder if twitter will survive this market crash. Trump should start buying the stock to support the company. The share price can go to IPO or below IPO prices. Without TWT, the markets would behave like they should.
Mr Mark Manley if you making money and calling others frightened little spectators, it seems to me that you are contradicting yourself. Why not keep quiet and continue making money. So if we are not spectators than you lose money? A 7 year old will laugh at you cause you not making any sense...LOL
A big thanks to all of you frightened little speculators, I'm making money hand over fist off of your predictable fear-based trading, keep it up!
“You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.” - ANDREW JACKSON
Now we'll have to vote for Republicans. We can't afford taxes or spending.
It is looking like Trump might have coronavirus.
We call it market sanitazation. Imagine in the US the guys who are running for president are the target market of the coronavirus
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