Stocks drop after virus aid stalls

Lawmakers keep negotiating as Dow drops 582 points

Stocks slumped further Monday after a rescue package to support the economy during the coronavirus crisis stalled in Congress. The Dow Jones Industrial Average dropped 582.05 points to end at 18,591.93, its first close below 19,000 since November 2016. The blue-chip average briefly wiped out its gains since Election Day 2016 when it slumped to session lows. The Standard & Poor’s 500 lost 2.9% to finish at 2,237.40, erasing all of its gains since President Donald Trump was inaugurated. Nine of the 11 sectors in the index closed lower, led by broad-based losses in energy, financial and real estate shares. On Friday, stocks posted their worst week since the financial crisis. Stocks dropped Monday even as the Federal Reserve prepared an expansion of lending programs in an effort to shield the economy from the virus. Top-level negotiations between Congress and the White House continued after the Senate voted against advancing a nearly $2 trillion economic rescue package again Monday following a failed procedural vote on Sunday. Over the weekend, Democrats said the bill was tilted too much toward aiding corporations and would not do enough to help individuals and health care providers weather the crisis. “The market doesn’t like uncertainty,” said Derek Maupin, research analyst at Hodges Capital Management. “Stimulus will help, but not until there’s more clarity around the virus issue.” With Monday’s losses, the stock market has lost more than a third of its value since its record high last month as more businesses shut down in hopes of slowing the spread of the coronavirus. The Fed said it plans to purchase an unlimited amount of Treasurys and mortgage securities in a bid to support financial markets. It also said that it would purchase commercial mortgage-backed securities. “We’ve got a lot of promise from the Fed, but they’re still going to need help from Congress,” says Scott Colyer, chief executive at Advisors Asset Management. “Does the Fed’s latest move solve our virus problem? No.” Gold futures surged after the Fed's emergency move on Monday. Gold for April delivery on the Comex rose $83, or 5.6%, to settle at $1,567.60 an ounce. Gold is considered a safer investment in times of crisis. Analysts are all but certain that the deadly virus will push the U.S. economy into a downturn as businesses close and shoppers stay home. “The U.S. economy almost certainly entered a recession this month, but in a very unconventional manner,” Jim Paulsen, chief market strategist at the Leuthold Group, said in a note. “The coronavirus forced U.S. officials to simply shut down the country. Like everything about this crisis, it is not the bad news that hurts the most, it is the total uncertainty.”