Reuters / Brendan McDermid
- US stocks plunged on Thursday after President Trump’s Wednesday coronavirus comments failed to calm investors’ nerves, and as scant additional details were provided around a potential stimulus plan.
- Trump’s 30-day European travel ban added to trepidation as airline stocks tumbled.
- The S&P 500 and the tech-heavy Nasdaq closed in bear-market territory, down more than 20% from recent highs. The Dow Jones industrial average fell further into bear territory after closing below the threshold on Wednesday.
- Losses temporarily pared in the afternoon after the Federal Reserve announced a stimulative bond-purchase plan. They then extended to near intraday lows.
- Trading was halted market-wide within minutes after the open on Thursday due to severe selling.
- Watch major indexes update live here.
US stocks plunged deeper into the red on Thursday after President Donald Trump’s address to the nation on Wednesday night failed to calm investors’ concerns about the economic fallout from the coronavirus outbreak. Traders then spent the day waiting for concrete details around a stimulus package that never materialized.
All three major US indexes closed more than 9% lower. The S&P 500 and the tech-heavy Nasdaq finished the session more than 20% below their recent highs, putting them in bear-market territory for the first time in 11 years. The Dow Jones industrial average, which closed in a bear market on Wednesday, extended losses.
Selling was so pronounced in the opening minutes of trading that a marketwide circuit breaker was enacted, halting trading for 15 minutes. After paring losses in the afternoon, stocks plunged to intraday lows as the close approached.
Trump’s remarks about the coronavirus outbreak – which lacked clarity about economic stimulus measures – spurred overnight futures losses that carried into Thursday trading. Trump also announced a 30-day European travel ban, adding to trepidation as airline stocks tumbled.
Here’s where major US indexes were trading as of the market close on Thursday:
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Losses temporarily pared in the afternoon after the Federal Reserve announced a stimulative bond-purchase plan. They then extended back to near intraday lows.
“It’s disappointing that markets couldn’t maintain their rally for more than a few minutes, but it would likely have been far worse without the Fed’s intervention,” Seema Shah, chief strategist at Principal Global Investors, said by email. “Now, markets likely need more.”
She continued: “More innovation from central banks, more targeted help for the most vulnerable parts of the economy – and action from fiscal authorities to stop this transitory shock from developing into a more prolonged insolvency crisis.”
The early halt in regular-hours trading came after future contracts on all three major US indexes hit “limit down” in premarket trading, hitting the 5% threshold. That persisted until regular trading began at 9:30 a.m. in New York.
“Markets are in complete crisis mode, past economic data has zero influence on investors’ decision, central bank emergency easing policies are not being effective and politicians’ actions are only adding more confusion,” Hussein Sayed, the chief market strategist at FXTM, told Business Insider in an email.
He added: “The one thing that investors are monitoring is how fast the coronavirus is spreading, how many lives it is taking and the number of countries and cities in complete lockdown. It literally feels like we are living in a science fiction movie.”
Travel-company stocks plunged on Thursday. Norwegian Cruise Line fell 36%, while Royal Caribbean Cruises slipped 31%. American Airlines, Delta Air Lines, and United Airlines all fell more than 17%.
Wall Street’s fear gauge, the Cboe volatility index, or VIX, spiked to more than 73, its highest since the financial crisis. Yields on US Treasurs were mostly flat, while fellow safe-haven asset gold slumped.Â
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