MANHATTAN — Overtaking last week’s record as the worst since the Black Monday of 1987, the coronavirus-ravaged New York stock market took a nearly 3,000-point nosedive on Monday.
The plummet kicked off right with the opening bell. Circuit breakers halted trading in early morning hours for a 15-minute breather, but the tumbling only continued throughout the day.
At the closing bell, the Dow Jones Industrial Average was down 13% for the day, sitting at 20,188 points, down 2,997.1 points.
The S&P 500 and Nasdaq had similar drops, of 12.98% and 12.32%, respectively.
The free-fall accelerated during a press conference in which President Donald Trump said the worst of the outbreak could last through August despite his prediction that “certain hotspots” throughout the U.S. could be locked down.
“This is a bad one. This is a very bad one,” Trump said. “This is bad in the sense that it’s so contagious.”
Even with his insouciance about Wall Street — “The market will take care of itself,” Trump said — the president’s remarks were far more dire than the president’s previous comments. As last week, Trump had claimed the pandemic was “under control” within the United States.
Earlier Monday, the president also urged state governors to try to purchase respirators and other medical equipment rather than wait on the federal government.
In response to the growing economic malaise, the administration and Congress are working on an $800 billion stimulus package. The House already passed a stimulus package last week.
Stock market futures hinted at a bad Monday when they dropped after the Federal Reserve announced Sunday it would lower the interest rate from as high as 1.25% to as high as 0.25%, their lowest rate since 2015. The move is designed to open up borrowing to corporations and is the Fed’s main tool to combat a recession.
The Fed also said it would purchase $500 billion worth of treasuries and $200 billion worth of mortgage-backed securities.
During a press conference Sunday minutes after the rate cute, President Trump — who had railed against Federal Reserve Chairman Jerome Powell for weeks — said he was very pleased.
“They did it in one step, and I think that people in the market should be very thrilled,” Trump said during a press conference, later adding: “I’m very happy they did it, and you’ll not hear anything bad about me unless “it’s a month or two from now.”
Markets, however, did not react positively to the rate cut.
Overnight stock market futures hit their “limit down” circuit breakers of 5%, halting further downward trades. European markets also took a bath, with the Stoxx 600 closed 5.1% below its start, and Germany’s DAX and France’s CAC 40 also suffered 5% declines.
Among the worst in Europe was Spain’s IBEX, which took a 8.3% plunge after the country announced a 15-day lockdown of nonessential movement. Spain ranks fourth in the world for confirmed coronavirus cases.
Asian markets were not immune, either, with the Nikkei losing 2.4% on the day and the Shanghai SE Composite index down 3.4%. Australia’s ASX 200 index suffered a massive 9.5% hit to its stock market.
Last week markets ended on an upswing following the president’s announcement of a national emergency, with the markets all closing about 9% higher than their opening and the Dow Jones closing at about 23,185 points.
Those gains followed a rollercoaster of highs and lows. On Monday, U.S. markets saw their sharpest drop since the 2008 financial crisis, falling 7% in early morning trading that day before a circuit breaker temporarily halted trading.
Trading on Thursday was similarly dire and hit another benchmark: the largest drop in the Dow since 1987’s Black Monday market crash.
Sandwiched in between on Tuesday, the markets recouped some losses, with the Dow closing about 600 points higher than when it opened.
COVID-19, the new strain of coronavirus responsible for a global pandemic, has now affected well over 179,000 worldwide and more than 4,200 confirmed in the United States, according to data compiled by Johns Hopkins University.
An estimated 7,000 — at least 69 of whom are in the United States — have died globally from the virus, data show.
But some officials claim the numbers are likely higher. A leading health official in Ohio estimates at least 100,000 people in the state already have coronavirus, while one estimate from the Centers for Disease Control and Prevention estimates 160 million Americans could end up infected over the course of the epidemic.
Over the weekend the CDC recommended limiting social gatherings to no more than 50 people. Several states, including New York, California and Ohio, have either mandated or recommended that bars and restaurants close or stay open only to provide take-out and delivery service.
Many schools have temporarily shuttered, including the largest in the United States: the New York City public school system.
During the press conference, Trump said he would rate his performance during the coronavirus crisis “a 10.”
“The market will take care of itself,” Trump said in response to the stock market drop.
— By Nick Rummel, CNS