US stocks tumbled on Wednesday (March 18), reaching a new coronavirus crisis low as investors worried about the economic damage from the pandemic, CNBC reported.
At the end of the session on Wednesday, The Dow Jones Industrial Average dropped 1,338.46 points, or 6.3% to 19,898.92, marking its first close below 20,000 since February 2017. The Dow was down more than 2,300 points at the lows of the session. The S&P 500 dropped 5.2% to 2,398.10 and closed nearly 30% below a record set last month. The Nasdaq Composite slid 4.7% to 6,989.84. Virtually no market was safe from the selling wave, with crude prices having their third-worst decline on record.
US stocks came off their lows in the final minutes of trading after the US Senate obtained the votes to pass the COVID-19 relief plan to expand paid leave.
Echoing concerns about the mounting economic impact of the COVID-19 virus and whether the government is doing enough to combat it, billionaire investor Bill Ackman said the best remedy for the market downturn and the outbreak in the U.S. is for President Donald Trump to shut down the country.
Trading on Wall Street was briefly suspended after a “circuit breaker” was tripped up. A circuit breaker halts trading across the U.S. stock exchanges for 15 minutes and is meant to ensure orderly market behavior. Wednesday marked the fourth time in a week that a circuit breaker was triggered.
Details of a potential fiscal stimulus package were not enough to curb the selling pressures in the market.
Dow Jones reported on Wednesday the Treasury Department is proposing two rounds of direct payments to citizens, which total $250 billion. Those payments, according to the report, would begin April 6. Treasury is also asking permission to backstop money markets, according to the report. A source familiar with the matter told CNBC on Tuesday the administration is seeking a stimulus package worth between $850 billion and more than $1 trillion.
The number of confirmed U.S. coronavirus cases has jumped to more than 6,400, according to data from Johns Hopkins University, while the death count has broken above 1000.
Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for a record eight consecutive sessions. This tops the previous record of six days from November 1929, according to LPL Financial.
A violent reversal in the US treasury yields in response to a potential $1 trillion stimulus package helped to unnerve investors as well on Wednesday.
The 10-year the US treasury yield jumped to 1.21% Wednesday after trading around 0.77% midday Tuesday (March 17) before details of the potential stimulus emerged. It began the week at around 0.65%. It wasn’t the outright rate level that caused uneasiness among traders, but the rapid nature of the move overnight.
