WALL ST. BATTERED
Virus, oil price plunge push Dow into free fall
Mounting fears over the coronavirus and a crash in oil prices sent stocks into a tailspin Monday and caused the first automatic trading halt on Wall Street in more than two decades — but President Trump claimed “Fake News” was largely to blame for the double dose of market volatility.
The Dow Jones industrial average plunged more than 2,000 points, or nearly 8%, early in the day, and interest rates on long-term bonds dropped to all-time lows, a sign that traders are expecting the U.S. economy to face hardships.
The S&P 500 and the Nasdaq followed suit and plunged 7.4% and 5.9%, respectively, in the first few minutes of trading, triggering the automatic pause. The marketspanning halt — a mechanism first adopted after the Wall Street crash of 1987 — has been used only once before, in 1997.
After the halt in trading, the indexes recovered somewhat but came down again before markets closed.
Both the Dow and the S&P had lost nearly 8% each at the closing bell. The Nasdaq dropped more than 7%. By the end of the day, the Dow was down 2,013.76 points, or 7.8%, closing at 23,851.02, its steepest drop since the financial crisis of 2008. It was the Dow’s single largest point drop in history.
The wobbly Wall Street results come as the rapidly spreading coronavirus continues to claim lives across the globe and force governments to implement harsh restrictions on travel. Adding to the coronavirus-related market fears, the price of oil sank nearly 20% on Monday after Russia and Saudi Arabia refused to slow down production amid a virus-related reduction in demand.
But Trump, who has faced scrutiny over his administration’s response to the virus, claimed journalists were somehow in part to blame for the market shakeup.
“Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop!” tweeted Trump, whose reelection bid is heavily invested in the relatively strong state of the U.S. economy.
A White House spokeswoman did not return a request for comment on how the media are to blame for the stock market plunge.
In response to the coronavirus, officials in Italy on Monday began a mandatory lockdown of 16 million people in the northern region — a drastic preventive measure expected to drive the country into a recession.
Italy has been hit harder than any other European country by the virus.
Italy’s stock index plunged 11.2% on Monday, and other European countries suffered market setbacks as well, with Britain, France and Germany down between 7.7% and 8.4%.
The results are Europe’s heaviest losses since the 2008
meltdown.
Monday’s sharp drop in oil prices can result in cheaper gasoline for consumers, but energy companies and countries dependent on oil-related revenue, including the U.S., can suffer as a result.
Nonetheless, Trump offered a rosy projection on this front.
“Good for the consumer, gasoline prices coming down!” he tweeted.
Trump has faced intense pushback from Democrats over his factually dubious claims about the coronavirus, including his false suggestion last week that the number of cases in the U.S. would be “close to zero” within days.
There are now more than 500 confirmed U.S. cases and at least 22 people have died.