Stocks plunge on worst day in 3 decades
NEW YORK — The U.S. stock market plunged to its worst day in more than three decades as voices from Wall Street to the White House said the coronavirus might be dragging the economy into a recession.
Monday’s 12 percent drop for the S&P 500 means it has plummeted almost 30 percent since setting a record less than a month ago, and it’s at its lowest point since the end of 2018. Losses were steep Monday, accelerating in the last half hour of trading after President Donald Trump said the economy might be headed for a recession and asked Americans to avoid gatherings of more than 10 people.
The plunge came even though the Federal Reserve rushed to announce a new round of emergency actions before markets opened for trading Monday. The moves are aimed at propping up the economy and getting financial markets running smoothly again, but they might have raised fears even further. Investors are also waiting for the White House and Congress to offer more aid to an economy that’s increasingly shutting down by the hour.
The Dow Jones Industrial Average plunged 2,997 points, or 12.9 percent, and, likewise, the S&P 500 had its worst loss since the Black Monday crash of 1987. It surpassed Thursday’s loss of 10 percent for the Dow.
The market’s losses the last few weeks are the steepest since the 2008 financial crisis dragged the economy into the Great Recession. Trump and professional investors say the stock market could bounce back as soon as health experts get the virus under control.
The problem is that no one knows when that could be, and broad swaths of the economy are grinding closer to a standstill.
Monday’s selling began immediately on Wall Street, sharp enough to trigger a temporary trading halt for the third time in the last two weeks. Losses were even sharper in Europe before paring, and major indexes there fell between 4 percent and 6 percent. Oil lost 9.5 percent and has more than halved this year. The world’s brightest spot might have been Japan, where the central bank announced more stimulus for the economy, and stocks still lost 2.5 percent.
“It’s impossible to say when and how we’re going to reach bottom,” said Danielle DiMartino Booth, chief executive officer of Quill Intelligence.
The spreading coronavirus is causing businesses around the world to shut their doors. While that can slow the spread of the virus, it’s also taking cash out of the pockets of businesses and workers. That has economists slashing their expectations for upcoming months, and Wells Fargo Securities said Monday it now projects the U.S. economy will fall into a recession in the April-through-June quarter.