U.S. stocks plunge into bear market amid coronavirus tumult
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Stocks fell more than 8% on Thursday morning, after reopening from a 15-minute trading halt for the second time this week.
Why it matters: The S&P 500 followed the Dow into bear market territory after days of market carnage. The coronavirus' economic toll, initially shrugged off by the stock market, looks set to end Wall Street's longest bull market in U.S. history.
- At its session low, the Dow plunged more than 2,000 points.
What they're saying: "The market is having a crisis of confidence," Joseph Trevisani, senior analyst at FXStreet, tells Axios.
Driving the news: President Trump addressed the nation from the Oval Office, but his speech only increased Wall Street's panic.
- Futures trading on all three major U.S. indexes had to be halted after falling by 5% ahead of the market open today.
- In contrast to a joint stimulus package from the Bank of England and U.K. Treasury for around $400 billion of tax breaks, government-funded sick pay and worker benefits announced earlier in the day, Trump's authorization of $50 billion of loans to certain companies looked weak and disjointed, investors said.
Between the lines: Worse, Trump's proposal to ban European travelers from entering the U.S. for 30 days likely worsens the economic outlook, Stephen Innes, global chief markets strategist at AxiCorp, told Bloomberg.
- "By criticizing Europe and not announcing stricter domestic travel measures in the U.S., President Trump is treating COVID-19 as a European and Asian problem. Clearly, the market doesn’t like this."
- "Now the 'no endgame in sight' risk-off trade takes over as traders are hammering the sell button now thinking the U.S. government has fallen well behind the curve in its Covid-19 response."
Flashback: Traders were underwhelmed by the Trump administration's lack of concrete stimulus proposals to offset the economic damage expected from the coronavirus outbreak Tuesday night and began selling S&P 500 futures.
- The market opened Wednesday morning nearly 2% below its previous closing level and proceeded to fall by another 3% throughout the day.
- The World Health Organization's decision to declare the coronavirus outbreak a pandemic, a Congressional doctor predicted the U.S. would see 70 million-150 million coronavirus cases, and lockdowns and quarantine measures ordered in countries around the world added fuel to the selloff's fire.
The big picture: Markets in Europe and Asia sank, with Australia's benchmark ASX index again falling by more than 7%, India's Sensex 8% lower, and Thailand's SET losing more than 10% overnight.
- Benchmarks in Hong Kong, Japan and South Korea all fell to multiyear lows.
- The pan-European Stoxx 50 index is down 9%, with some euro area indexes lower by as much as 10%.
What to watch: The Washington Post reported Wednesday that Trump also was working to pressure Fed chair Jerome Powell to "figure out a way to stimulate the economy," citing three White House officials with knowledge of the matter.
- Of note: The European Central Bank did not lower its main interest rate on Thursday, which is already at -0.5%, but it announced a package of other measures to shield the eurozone economy, including upping bond purchases and offering cheap loans for banks.
Go deeper: Stocks sink 4% as Dow closes in bear market
