Date: 2025-02-05 Page is: DBtxt003.php txt00018479
Coronavirus Crisis
Capital Markets / Society
CNN telling the stories ... everything in turmoil
Peter Burgess
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Date: 2025-02-05 Page is: DBtxt003.php txt00018479 | |||||||||
Coronavirus Crisis | |||||||||
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Burgess COMMENTARY Peter Burgess | |||||||||
| Dow drops to three-year low as stocks tumble again NEW YORK, NEW YORK - MARCH 09: Traders work on the floor of the New York Stock Exchange (NYSE) on March 09, 2020 in New York City. As global fears from the coronavirus continue to escalate, trading was halted for 15 minutes after the opening bell as stocks fell 7 percent. (Photo by Spencer Platt/Getty Images) WASHINGTON, DC - FEBRUARY 12: Federal Reserve Board Chairman Jerome Powell testifies during a hearing on "The Semiannual Monetary Policy Report to the Congress," in front of the Senate Banking, Housing and Urban Affairs Committee in the Dirksen Senate Office Building on February 12, 2020 in Washington, DC. (Photo by Sarah Silbiger/Getty Images) Fed slashes rates in first emergency cut since 2008 What is a stock market correction? NEW YORK, NEW YORK - MARCH 09: Traders work on the floor of the New York Stock Exchange (NYSE) on March 09, 2020 in New York City. As global fears from the coronavirus continue to escalate, trading was halted for 15 minutes after the opening bell as stocks fell 7 percent. (Photo by Spencer Platt/Getty Images)NOW PLAYING What is a bear market? NYSE president: We can trade entirely electronic Mohamed El-Erian: Fed shouldn't have fired all its ammunition A recession may be inevitable. Here's why NEW YORK, NY - OCTOBER 03: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on October 3, 2019 in New York City. The Dow Jones Industrial Average dropped over 250 on Thursday morning after the release of disappointing economic data. The Institute for Supply Management said its reading on the U.S. services sector fell last month to its lowest level level since August 2016. (Photo by Drew Angerer/Getty Images) Dow drops over 2,300 points in one day FRANKFURT AM MAIN, GERMANY - MARCH 12: The destination board shows cancelled flights to America and Israel at Frankfurt Airport on March 12, 2020 in Frankfurt, Germany. U.S. President Donald Trump has announced he is imposing a ban, beginning tomorrow at midnight, on most travellers from continental Europe in an effort to stop the spread of the coronavirus. U.S. citizens and their families will still be allowed to travel and the measure is not supposed to affect international trade. Europe currently has approximately 25,000 confirmed cases of the coronavirus, with approximately half of those in Italy. (Photo by Thomas Lohnes/Getty Images) Mohamed El-Erian: Markets are pricing in a global recession Meric Greenbaum, Designated Market Maker IMC financial looks up at the board before the opening bell right before trading halted on the New York Stock Exchange on March 9, 2020 in New York. - Trading on Wall Street was temporarily halted early March 9, 2020 as US stocks joined a global rout on crashing oil prices and mounting worries over the coronavirus.The suspension was triggered after the S&P 500's losses hit seven percent. Near 1340 GMT, the broad-based index was down more than 200 points at 2,764.21. (Photo by Timothy A. Clary/AFP/Getty Images) Stock market circuit breakers, explained FILE - This Jan. 31, 2020, file photo shows a Wall Street sign in front of the New York Stock Exchange. (AP Photo/Mark Lennihan, File) Coronavirus takes another massive toll on Wall Street Goldman Sachs strategist on how to invest during the pandemic Why some companies can still IPO despite coronavirus Oil rig pumpjacks, also known as thirsty birds, extract crude from the Wilmington Field oil deposits area where Tidelands Oil Production Company operates near Long Beach, California July 30, 2013. REUTERS/David McNew (UNITED STATES - Tags: ENERGY BUSINESS) Why oil prices are slumping NYSE president: Markets are behaving 'normally' Scaramucci: Expect more market volatility from the coronavirus Strategist on market volatility: Fear is an epidemic WASHINGTON, DC - FEBRUARY 12: Federal Reserve Board Chairman Jerome Powell testifies during a hearing on "The Semiannual Monetary Policy Report to the Congress," in front of the Senate Banking, Housing and Urban Affairs Committee in the Dirksen Senate Office Building on February 12, 2020 in Washington, DC. (Photo by Sarah Silbiger/Getty Images) Fed slashes rates in first emergency cut since 2008 What is a stock market correction? NEW YORK, NEW YORK - MARCH 09: Traders work on the floor of the New York Stock Exchange (NYSE) on March 09, 2020 in New York City. As global fears from the coronavirus continue to escalate, trading was halted for 15 minutes after the opening bell as stocks fell 7 percent. (Photo by Spencer Platt/Getty Images) What is a bear market? NYSE president: We can trade entirely electronic Mohamed El-Erian: Fed shouldn't have fired all its ammunition A recession may be inevitable. Here's why NEW YORK, NY - OCTOBER 03: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on October 3, 2019 in New York City. The Dow Jones Industrial Average dropped over 250 on Thursday morning after the release of disappointing economic data. The Institute for Supply Management said its reading on the U.S. services sector fell last month to its lowest level level since August 2016. (Photo by Drew Angerer/Getty Images) Dow drops over 2,300 points in one day FRANKFURT AM MAIN, GERMANY - MARCH 12: The destination board shows cancelled flights to America and Israel at Frankfurt Airport on March 12, 2020 in Frankfurt, Germany. U.S. President Donald Trump has announced he is imposing a ban, beginning tomorrow at midnight, on most travellers from continental Europe in an effort to stop the spread of the coronavirus. U.S. citizens and their families will still be allowed to travel and the measure is not supposed to affect international trade. Europe currently has approximately 25,000 confirmed cases of the coronavirus, with approximately half of those in Italy. (Photo by Thomas Lohnes/Getty Images) Mohamed El-Erian: Markets are pricing in a global recession Meric Greenbaum, Designated Market Maker IMC financial looks up at the board before the opening bell right before trading halted on the New York Stock Exchange on March 9, 2020 in New York. - Trading on Wall Street was temporarily halted early March 9, 2020 as US stocks joined a global rout on crashing oil prices and mounting worries over the coronavirus.The suspension was triggered after the S&P 500's losses hit seven percent. Near 1340 GMT, the broad-based index was down more than 200 points at 2,764.21. (Photo by Timothy A. Clary/AFP/Getty Images) Stock market circuit breakers, explained FILE - This Jan. 31, 2020, file photo shows a Wall Street sign in front of the New York Stock Exchange. (AP Photo/Mark Lennihan, File) Coronavirus takes another massive toll on Wall Street New York (CNN Business)US stocks are sharply lower on Monday, with the Dow falling to its lowest level in nearly three years. Worries mounted that central banks' emergency measures over the weekend meant the economy is in much worse shape than previously believed. Instead of soothing the markets, another emergency interest rate cut from the Federal Reserve had the opposite effect. Stocks tripped a circuit breaker at the New York open, with the S&P 500 (SPX) falling more than 7%. Trading was halted for 15 minutes. Mid-morning, the index was down 7.9%, off its earlier lows. The Dow (INDU) was 8.3%, or 1,920 points, lower. The Dow hasn't been this low since May 2017. The Nasdaq Composite (COMP) dropped 7.8%. There are now more than 3,000 cases of the novel coronavirus in the United States, according to government agencies and the CDC. Stocks plunged around the world Monday as data showed the outbreak has caused an unprecedented economic collapse in China. Markets were battered across Asia, with Australia's benchmark index crashing nearly 10% in its worst day on record. In Europe, London's FTSE 100 (UKX) fell 5.7%, while France's CAC 40 (CAC40) plunged 7% and Germany's DAX (DAX) dropped roughly 5.7%. The European indexes have also come off their lows. The European Securities and Markets Authority required short sellers to provide more information about their activities, saying the pandemic 'constitutes a serious threat to the orderly functioning and integrity of the financial markets.' 'There is a clear risk that such downward trend will continue in the coming days and weeks,' the regulator said in a statement. Investors bailed out of stocks despite a massive intervention by the US Federal Reserve on Sunday. The central bank slashed rates to close to zero at an emergency meeting, and said it would purchase another $700 billion worth of Treasury bonds and mortgage-backed securities. The shock rate cut is designed to prevent the economic shock leading to the kind of credit crunch and financial market disruptions that occurred during the global financial crisis — the last time the Fed cut rates all the way to the bottom. 'I don't think [the Fed] would have done this unless they felt the financial markets were at significant risk of freezing up tomorrow. They're very concerned the financial markets won't work. So I don't know how the markets take solace in this,' Mark Zandi, chief economist of Moody's Analytics, told CNN Business. The Fed also coordinated action with the European Central Bank, Bank of England, Bank of Japan, Bank of Canada and Swiss National bank to shore up liquidity in the financial system. On Monday, airline stocks were badly hit as they announced waves of flight cancellations in response to global travel restrictions. In Europe, Air France KLM (AFLYY) dropped 16%, while British Airways-owener IAG (ICAGY) dropped nearly 26%. In the US, American Airlines (AAL) shares fell some 8%, while United Airlines (UAL) was down some 17%. Brent crude, the global benchmark for oil, declined nearly 10% to $30.57 per barrel. Rough day in Asia Markets in Asia Pacific were rocked by data showing the Chinese economy has been hit harder than expected by the coronavirus outbreak. Retail sales in China plunged 20.5% in the January-to-February period from a year earlier, much worse than the forecast 0.8% rise by analysts polled by Reuters, according to the National Bureau of Statistics. Industrial output also fell 13.5% during the same period, while fixed asset investment plunged 24.5%, both widely missing estimates. Mao Shengyong, a spokesman for the National Bureau of Statistics, said at a press conference that China will increase policy support to counter the virus' impact, including active fiscal measures and prudent monetary measures to support businesses, as well as special policies to protect jobs. But that failed to calm investors. Hong Kong's Hang Seng Index (HSI) finished down 4%, while Japan's Nikkei 225 (N225) shed 2.5%. China's Shanghai Composite (SHCOMP) closed down 3.4%. The People's Bank of China on Monday pumped 100 billion yuan ($14.3 billion) into the financial system by offering loans to banks. On Friday, the central bank announced it would cut the amount of cash banks need to hold as reserves, injecting around 550 billion yuan ($78.6 billion) into the economy. The central bank also said it would take other measures to lower borrowing costs to protect the economy that has been damaged by the coronavirus outbreak. Elsewhere, the Bank of Japan announced that it would increase its purchases of exchange-traded funds, as well as corporate and governments bonds. The Reserve Bank of Australia also said it stand s ready to purchase Australian government bonds to support the market. It said further policy measure will come out on Thursday. Global monetary policy support is coming 'thick and heavy,' said Stephen Innes, global chief markets strategist at AxiCorp. But the biggest concern is that the the world's top central banks have exhausted their policy tool kit, especially the Fed, the biggest and most influential one of them all, he said. 'The markets now appear kind of defenseless to another selling onslaught, so the fiscal step is crucial in avoiding a dreaded global credit event,' Innes added. — David Goldman and Chris Isidore contributed to this report. — An earlier version of this story misspelled the name of China's National Bureau of Statistics spokesman Mao Shengyong. Goldman Sachs strategist on how to invest during the pandemic Why some companies can still IPO despite coronavirus Oil rig pumpjacks, also known as thirsty birds, extract crude from the Wilmington Field oil deposits area where Tidelands Oil Production Company operates near Long Beach, California July 30, 2013. REUTERS/David McNew (UNITED STATES - Tags: ENERGY BUSINESS) Why oil prices are slumping NYSE president: Markets are behaving 'normally' Scaramucci: Expect more market volatility from the coronavirus Strategist on market volatility: Fear is an epidemic | |||||||||