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Stocks Continue Tumble Even After Fed Steps In: Live Updates Stocks Plunge By the Most Since 1987: Live Updates
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Stocks fell on Thursday, as President Trump’s latest effort to address the coronavirus outbreak — a ban on the entry of most Europeans to the United States — failed to assuage investors’ concerns about the global economy. Stocks continued their plunge on Thursday, as President Trump’s latest effort to address the coronavirus outbreak — a ban on the entry from most European countries to the United States — disappointed investors who have been waiting for Washington to take steps to bolster the economy.
Markets in the United States recovered slightly from the worst of those declines after the Federal Reserve Bank of New York said it would offer at least $1.5 trillion worth of short-term loans to banks today and tomorrow, but the S&P 500 quickly resumed its fall. It was down more than 7 percent Thursday afternoon. Trading was turbulent, with stocks staging a brief comeback as investors reacted to the Federal Reserve’s decision to offer at least $1.5 trillion worth of loans to banks to help smooth out the functioning of the financial markets. But the comeback was quickly over and selling picked up again by midafternoon.
Waves of selling in stocks this week have left the Dow Jones industrial average and several major global benchmarks in bear market territory — a term that signifies stocks have fallen more than 20 percent from their highs. Without a substantial recovery on Thursday, the S&P will end there as well. The S&P 500 closed down about 9.5 percent, its biggest daily drop since the stock market crashed in 1987, on what came to known as Black Monday. The decline has left stocks in the United States firmly in a bear market — a term that signifies a decline of 20 percent from the most recent highs.
The declines follow a spate of late news from the United States on Wednesday. Mr. Trump announced that the United States would stop most Europeans outside Britain from traveling to the country for 30 days in an effort to slow the spread of the virus. The State Department advised Americans to reconsider all international travel. The National Basketball Association suspended its season after a player tested positive. For the Dow Jones industrial average, the drop of 10 percent was its worst since the 1987 stock market crash, on what came to be known as Black Monday.
With global growth on the line, investors have been looking for world leaders to step in to keep the economic gears turning. Mr. Trump on Wednesday said he would extend financial relief for sick workers and would ask Congress for more. Britain has said it would spend more than $30 billion. Central banks are cutting interest rates, or taking steps to keep them suppressed. The travel ban hit shares in Europe particularly hard, with major stock indexes there down more than 10 percent and one regional benchmark suffering its worst-ever decline. It also battered airline stocks. And, with oil prices falling, energy companies were among the day’s biggest losers, too.
For investors, it hasn’t been enough. Waves of selling have come as investors have been dismayed by Washington’s inability to rally around a meaningful response to the economic toll the outbreak will take. Mr. Trump said on Wednesday that he would extend financial relief for sick workers and would ask Congress for more. But he remained at loggerheads with Congress on more comprehensive measures.
“The past few days has found the market waiting for decisive and intelligent action on fiscal policy front,” said Carl Tannenbaum, chief economist at Northern Trust. “Until there are details on the steps that leadership intends to pursue to remedy the economic effects of the viral outbreak, equity markets will be vulnerable.” The most notable step Mr. Trump announced on Wednesday, that the United States would stop travel from most European countries outside Britain for 30 days, hurt financial markets more than it helped. And on Thursday, he said he could restrict domestic travel to regions of the United States when the coronavirus becomes “too hot.”
The travel ban hit shares in Europe particularly hard, with major stock indexes there down more than 10 percent and one regional benchmark suffering its worst-ever decline. “Until there are details on the steps that leadership intends to pursue to remedy the economic effects of the viral outbreak, equity markets will be vulnerable,” said Carl Tannenbaum, chief economist at Northern Trust.
It also battered airline and cruise stocks. With oil prices falling more than 5 percent, energy companies were among the day’s worst performers, too.
The Federal Reserve Bank of New York responded on Thursday to increasingly fraught market conditions by announcing that it would offer at least $1.5 trillion worth of short-term loans to banks today and tomorrow and change the structure of its ongoing asset purchase program.The Federal Reserve Bank of New York responded on Thursday to increasingly fraught market conditions by announcing that it would offer at least $1.5 trillion worth of short-term loans to banks today and tomorrow and change the structure of its ongoing asset purchase program.
The moves came as the markets for a variety of bonds — including usually easy-to-trade Treasuries — turned messier starting on Wednesday. Traders and strategists reported that markets were thin, and the gap between the prices buyers offered and those that sellers asked for was widening. At the same time, tremors had developed in funding markets, the plumbing of financial markets in which cash flows between banks, as fears over the coronavirus’ economic caused gyrations across Wall Street.
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The moves came as the markets for a variety of bonds — including usually easy-to-trade Treasuries — turned messier starting on Wednesday. Traders and strategists reported that markets were thin, and the gap between the prices buyers offered and those that sellers asked for was widening. At the same time, tremors had developed in funding markets, the plumbing of financial markets in which cash flows between banks, as fears over the coronavirus’ economic caused gyrations across Wall Street.
“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement.“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement.
Specifically, the central bank announced that it would offer $500 billion in a three-month repurchase operation Thursday afternoon. It also said that it would begin to buy government debt “across a range of maturities.” In recent months, it has been buying $60 billion a month only in short-term Treasury bills.Specifically, the central bank announced that it would offer $500 billion in a three-month repurchase operation Thursday afternoon. It also said that it would begin to buy government debt “across a range of maturities.” In recent months, it has been buying $60 billion a month only in short-term Treasury bills.
Analysts viewed the moves as warranted given funding constraints on Wall Street.Analysts viewed the moves as warranted given funding constraints on Wall Street.
“This is a full-blown crisis response operation, intended to make it abundantly clear that the Fed will not allow liquidity to dry up,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note.“This is a full-blown crisis response operation, intended to make it abundantly clear that the Fed will not allow liquidity to dry up,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note.
Mr. Shepherdson also said the move puts an end to the Federal Reserve’s previous insistence that its $60 billion Treasury bill-buying campaign was not the same as its crisis-era bond buying program known as “quantitative easing.” That program, which went through three rounds ending with what’s known as QE3, was intended to prop up the economy during and after the Great Recession.
“QE4 is here,” he wrote.
October 19, 1987, became known as Black Monday on Wall Street, when the Dow Jones industrial average fell 22.6 percent. In London, Black Monday was spread over two days — with the FTSE 100 in London falling 10.8 percent on Monday and 12.2 percent on Tuesday.October 19, 1987, became known as Black Monday on Wall Street, when the Dow Jones industrial average fell 22.6 percent. In London, Black Monday was spread over two days — with the FTSE 100 in London falling 10.8 percent on Monday and 12.2 percent on Tuesday.
The decline in the FTSE 100 on Thursday was the index’s worst single-day drop since then — surpassing its biggest decline of the financial crisis in 2008.The decline in the FTSE 100 on Thursday was the index’s worst single-day drop since then — surpassing its biggest decline of the financial crisis in 2008.
Unlike stocks in the United States, trading in London has been volatile for years as investors faced the uncertainty of Britain’s exit from the European Union and the economic chaos that might cause. But the fast spread of the coronavirus in Europe has hit the index, and its counterparts on the European continent, particularly hard. The FTSE 100 is down about 30 percent since the start of the year, compared with the S&P 500’s drop of about 23 percent.Unlike stocks in the United States, trading in London has been volatile for years as investors faced the uncertainty of Britain’s exit from the European Union and the economic chaos that might cause. But the fast spread of the coronavirus in Europe has hit the index, and its counterparts on the European continent, particularly hard. The FTSE 100 is down about 30 percent since the start of the year, compared with the S&P 500’s drop of about 23 percent.
News of the latest travel ban imposed by the United States hammered shares of the three big American carriers that fly trans-Atlantic routes: United Airlines, Delta Air Lines and American Airlines all fell more than 10 percent Thursday morning.
Already reeling from a steep decline in bookings because of the coronavirus outbreak, the airlines could lose millions of dollars in revenue from the U.S. ban on most passenger travel from continental Europe, announced by Mr. Trump on Wednesday night. Trans-Atlantic flights account for a big chunk of the carriers’ international business.
Carnival Corporation also plunged after its Princess Cruises unit said it would suspend all cruises for the next two months. Royal Caribbean Cruises and Norwegian Cruise Line were also down more than 20 percent.
One of the first major coronavirus outbreaks took place on a Princess ship off the coast of Japan, the Diamond Princess. Eight people died and more than 700 were infected. And more than 20 people linked to a second Princess cruise ship in California, the Grand Princess, have also tested positive for the virus.
Most Americans surveyed are worried about the economic impact of the coronavirus outbreak, with concern greatest among Democrats and independent voters, according to a nationwide poll conducted by the online research firm SurveyMonkey for The New York Times.Most Americans surveyed are worried about the economic impact of the coronavirus outbreak, with concern greatest among Democrats and independent voters, according to a nationwide poll conducted by the online research firm SurveyMonkey for The New York Times.
The partisan gap in attitudes in the survey, which was begun last week and completed on Sunday, may reflect Republicans’ greater receptivity to President Trump’s assurances that the economy remains strong and that the virus is under control in the United States.The partisan gap in attitudes in the survey, which was begun last week and completed on Sunday, may reflect Republicans’ greater receptivity to President Trump’s assurances that the economy remains strong and that the virus is under control in the United States.
Three-quarters of independents and more than 8 in 10 Democrats said they worried that the virus outbreak would hurt the economy. Two-thirds of Republicans expressed similar concern.Three-quarters of independents and more than 8 in 10 Democrats said they worried that the virus outbreak would hurt the economy. Two-thirds of Republicans expressed similar concern.
Political differences were even more pronounced on questions about the potential health effects of the coronavirus and personal precautions against it.Political differences were even more pronounced on questions about the potential health effects of the coronavirus and personal precautions against it.
Fewer than two in five Republican respondents in the poll said they were worried that they or someone in their family would be exposed to the virus. Nearly seven in 10 said they had made no changes, such as reducing travel, working from home or wearing medical face masks in public, in response to the virus.Fewer than two in five Republican respondents in the poll said they were worried that they or someone in their family would be exposed to the virus. Nearly seven in 10 said they had made no changes, such as reducing travel, working from home or wearing medical face masks in public, in response to the virus.
In both cases, Democrats and independents expressed significantly higher degrees of alarm.In both cases, Democrats and independents expressed significantly higher degrees of alarm.
The Institute of International Finance cut its forecast for U.S. economic sharply last week, and on Thursday it said things will be even worse because of the surge in oil prices and increasing risk of “credit stress.” As a result, the think tank has raised its projection for the possibility of a recession.The Institute of International Finance cut its forecast for U.S. economic sharply last week, and on Thursday it said things will be even worse because of the surge in oil prices and increasing risk of “credit stress.” As a result, the think tank has raised its projection for the possibility of a recession.
As the coronavirus spreads, policymakers are limited in what they can do to protect the economy, wrote Robin Brooks, the institute’s chief economist, and his colleague Jonathan Fortun. Money is tumbling out of emerging market countries, a sign of investor fear, at a pace not seen even during the 2008 financial crisis, based on IIF data. As the coronavirus spreads, policymakers are limited in what they can do to protect the economy, wrote Robin Brooks, the institute’s chief economist, and his colleague Jonathan Fortun. Money is tumbling out of emerging market countries, a sign of investor fear, at a pace not seen even during the 2008 financial crisis, based on IIF data.
“(A) global ‘sudden stop’ is in the making, one that could present substantial downside risk to our forecasts,” they wrote, noting that a similar seizing up in foreign financing came at huge economic cost to both Turkey and Argentina in 2018.“(A) global ‘sudden stop’ is in the making, one that could present substantial downside risk to our forecasts,” they wrote, noting that a similar seizing up in foreign financing came at huge economic cost to both Turkey and Argentina in 2018.
Paramount Pictures, a division of ViacomCBS, said on Thursday morning that it would abandon a plan to release “A Quiet Place Part II” on March 20. The studio has struggled to turn itself around in recent years and had been counting on the movie to be a much-needed hit. The first “Quiet Place” collected $341 million in 2018. CBS and NBC both canceled their annual spring showcases for advertisers, known as upfronts, on Thursday because of fears surrounding the coronavirus.
Paramount also pulled two films with smaller stakes: “Blue Story,” a drama based on Rapman’s YouTube series that was supposed to arrive in limited release on March 20; and “The Lovebirds,” a crime comedy starring Issa Rae and Kumail Nanjiani that had been set for April 3 release. At the star-studded events, which take place in mid-May and are among the biggest in the television industry, entertainment executives unveil their new upcoming television series and do their best to persuade advertising agencies to buy commercial time.
Also on Thursday, Universal Pictures, part of Comcast, said that it would push back “F9,” the ninth installment in its “Fast and Furious” series. “F9” was not scheduled to arrive until May 22. But the studio said that it could not be certain that public life around the world would be back to normal by then and rescheduled the film for release in April 2021. “We’ll miss Carnegie Hall and our agency dinners this year, but the health and safety of our clients and the ViacomCBS team comes first,” said Jo Ann Ross, the chief advertising revenue officer at ViacomCBS.
Both companies, along with others like Twitter, YouTube and Roku, said they will instead post video presentations online. Cable outlets like Fox News and AMC Networks have also canceled events.
The cancellations could cause havoc for the media companies at a time when they are already confronting diminished ratings and relevance as more people shift to commercial-free streaming video platforms like Netflix, Disney Plus and Amazon’s Prime Video.
The European Central Bank stepped up its purchases of government and corporate bonds, but disappointed expectations that it would cut a key interest rate.The European Central Bank stepped up its purchases of government and corporate bonds, but disappointed expectations that it would cut a key interest rate.
The actor Tom Hanks said he and his wife, Rita Wilson, had tested positive for the coronavirus. The 63-year-old Academy Award-winning actor is in Australia, where he was set to film a movie about the life of Elvis Presley.The actor Tom Hanks said he and his wife, Rita Wilson, had tested positive for the coronavirus. The 63-year-old Academy Award-winning actor is in Australia, where he was set to film a movie about the life of Elvis Presley.
President Trump’s travel ban will hit jet fuel consumption hard. Bjornar Tonhaugen, head of oil market research at Rystad Energy, estimated that jet fuel use will drop by 600,000 barrels a day, or about 9 percent of the total market.President Trump’s travel ban will hit jet fuel consumption hard. Bjornar Tonhaugen, head of oil market research at Rystad Energy, estimated that jet fuel use will drop by 600,000 barrels a day, or about 9 percent of the total market.
Iran has asked the International Monetary Fund for a $5 billion emergency loan as it grapples with the deadly coronavirus, the nation’s foreign minister, Javad Zarif, disclosed on Twitter on Thursday.Iran has asked the International Monetary Fund for a $5 billion emergency loan as it grapples with the deadly coronavirus, the nation’s foreign minister, Javad Zarif, disclosed on Twitter on Thursday.
The rate on a 30-year fixed-rate mortgage has dropped to about 3.74 percent, and the Mortgage Bankers Association said Wednesday that refinancing applications jumped 79 percent last week.
Reporting was contributed by Jack Ewing, Peter S. Goodman, Liz Alderman, Alexandra Stevenson, Isabella Kwai, Keith Bradsher, Nicole Perlroth, Matthew Goldstein, Geneva Abdul and Carlos Tejada.Reporting was contributed by Jack Ewing, Peter S. Goodman, Liz Alderman, Alexandra Stevenson, Isabella Kwai, Keith Bradsher, Nicole Perlroth, Matthew Goldstein, Geneva Abdul and Carlos Tejada.