ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Markets

Dow slides 3,000 as coronavirus shuts down America

Worst point loss in history despite Fed's big rate cut

A man in a surgical mask walks by the New York Stock Exchange as the coronavirus continued to pound the market on March 16.   © Reuters

NEW YORK -- U.S. equities plunged again Monday as drastic action by the Federal Reserve failed to assuage investors' fears about the economic impact of the coronavirus pandemic.

The Dow Jones Industrial Average closed 2,997 points lower at 20,188, the worst point loss in history. The 13% drop was the largest since Black Monday in 1987.

The S&P 500 slipped 12%, or 324 points, to 2,386.

The S&P 500's decline triggered a circuit breaker for the third time in two weeks, halting trading for 15 minutes. This mechanism pauses trading after declines of 7% and 13% from the previous trading day's close, and shuts down markets for the day at 20%.

The drop followed the Fed on Sunday slashing interest rates to zero and pledging $700 billion in asset purchases, suggesting a lack of confidence that central bank toolboxes can shore up the economy in a global pandemic. Benchmark 10-year U.S. Treasury yields tumbled more than 20 basis points from Friday's close.

President Donald Trump had praised the Fed's move at a White House briefing Sunday. "It makes me very happy. And I want to congratulate the Federal Reserve," he said.

"I think that people in the market should be very thrilled," Trump said.

The losses wiped out the gains from Friday's dramatic rally, the latest development in a market that has whipsawed amid what is seen as the greatest economic threat since the 2008 global financial crisis.

The market crash came as the impact of the coronavirus began to be felt across the U.S., with New York City closing its public schools -- the largest system in the country -- until April 2, and shutting restaurants and cafes for the next eight weeks.

Similar measures were taken in other major cities, with Los Angeles, San Francisco, Houston, Seattle and Washington, D.C. announcing school closures.

Restaurants in New York City have been ordered to close for the next eight weeks.   © Reuters

Bars and restaurants have been closed in states such as California, Ohio, Illinois, Massachusetts and Washington.

Shares of airlines were down double digits in morning trading after CAPA Center for Aviation released a report Monday saying that most airlines in the world will be bankrupt by the end of May unless governments take action to save them. 

Those shares sharply recovered after The Wall Street Journal reported that U.S. airlines were in talks with the government to obtain as much as $50 billion in financial assistance.

Bank shares were down across the board after eight of America's biggest banks said Sunday in a joint statement that they will suspend their share buyback programs until at least July amid the "unprecedented challenge" they face.

Prior to the U.S. opening, East Asian markets suffered a milder fall, with Japan's Nikkei Stock Average, Hong Kong's Hang Seng Index and the Shanghai Composite Index dropping 2.5%, 4% and 3.4% respectively. South Korea's KOSPI was down 3.2%.

These losses also came despite central bank action, with the Bank of Japan on Monday doubling its purchasing targets for exchange-traded funds and real estate investment trusts.

The Australian ASX/200 index slumped 9.7% as the country's central bank said it was ready to buy government bonds and speculation mounted over the possibility of further fiscal stimulus.

India's S&P BSE SenseX index declined 8%, while benchmark indexes in Singapore and Indonesia retreated 5.2% and 4.4% respectively. Thailand dropped 7.3%, and the Philippines tumbled 7.9%.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more