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Dow ends 10% lower in worst session since 1987

Dow ends 10% lower in worst session since 1987

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: The Dow suffered its worst session since 1987 on Thursday (Mar 12), plunging 10 per cent as emergency measures by central banks failed to douse mounting recession fears due to the coronavirus.

The Dow Jones Industrial Average finished down 2,352.60 points (9.99 per cent) at 21,200.62.

The broad-based S&P 500 plunged 260.74 points (9.51 per cent) to 2,480.64, while the tech-rich Nasdaq Composite Index tumbled 750.25 points (9.43 per cent) to 7,201.80.

Thursday's session means the S&P 500, like the Dow, is now in a "bear market," a drop of more than 20 per cent from a market peak, ending the longest "bull market" in history.

READ: Up to 150 million Americans could get coronavirus: US projection

"Bottoming is a process, it's not a one-day process normally," said Quincy Krosby, chief market strategist for Prudential Financial.

"Now the idea of a recession is part of the narrative. Are we going into one? And if we are, how deep will it be? Will we have a recovery in the second half?"

Stocks were deep in the red the entire session, which was paused for 15 minutes early in the day after the S&P 500's losses hit seven per cent, triggering an automatic suspension.

Equities briefly cut their losses after the New York Federal Reserve announced measures to inject an additional US$1.5 trillion in cash into financial markets this week.

But the bounce proved short-lived. Emergency measures announced by the European Central Bank also did little to reassure investors in Paris and Frankfurt, where bourses lost more than 12 per cent.

READ: France closes schools, urges elderly to stay home over coronavirus

While President Donald Trump and congressional Democrats sparred over details in a stimulus package, investors absorbed a running stream of announcements of major event cancellations and other economic dislocations.

Major League Baseball postponed its season by at least two weeks, while New York banned events with more than 500 people as the Broadway League announced theatres would be shut for a month.

New York banned public gatherings of more than 500 people, including shows in Manhattan's iconic Broadway theater district AFP/TIMOTHY A. CLARY

President Donald Trump's shock announcement to bar travel from Europe for 30 days battered airline and travel stocks, with Delta Air Lines and United Airlines each losing more than 20 per cent.

READ: US to suspend all travel from Europe for 30 days to fight COVID-19 outbreak

READ: Airline stocks nosedive as US travel ban hits EU travel industry

The bleak outlook for airlines also again weighed on Boeing, which plunged 18.1 per cent, making it again the biggest loser in the Dow.

Restaurant stocks were another big loser, with Darden Restaurants and Brinker International down around 15 per cent or more.

Shares of Carnival cruise lines plunged 31.2 per cent as it announced it would pause its Princess line for two months.

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Source: AFP/de


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