Worst day on Wall Street since 1987 as fears spread

The Kansas City Star - - Business - BY STAN CHOE AND ALEX VEIGA

The es­ca­lat­ing coro­n­avirus emer­gency Thurs­day sent stocks to their worst losses since the Black Mon­day crash of 1987, ex­tend­ing a sell-off that has now wiped out most of Wall Street’s big run-up since Pres­i­dent Don­ald Trump’s elec­tion.

The S&P 500 plum­meted 9.5%, for a to­tal drop of 26.7% from its all-time high, set just last month. That puts it way past the 20% thresh­old to make this a bear market, snap­ping an unpreceden­ted, nearly 11-year bull-market run. The Dow Jones In­dus­trial Aver­age sank 10% for its worst day since a nearly 23% drop on Oct. 19, 1987.

Euro­pean mar­kets lost 12% in one of their worst days ever, even af­ter the Euro­pean Cen­tral Bank pledged to buy more bonds and of­fer more help for the econ­omy.

The heavy losses came amid a cas­cade of can­cel­la­tions and shut­downs across the globe – in­clud­ing Trump’s sus­pen­sion of most travel to the U.S. from Europe – and ris­ing wor­ries that the White House and other au­thor­i­ties around the world can’t or won’t counter the eco­nomic dam­age from the coro­n­avirus pan­demic any time soon.

“The news just con­tin­ues to get worse, and the travel ban puts an ex­cla­ma­tion point on the weak­ness we’re go­ing to see in global GDP and, in turn, the U.S.,” said Liz Ann Son­ders, chief in­vest­ment strate­gist at Charles Sch­wab. “We’re start­ing to get a sense of how dire the im­pact on the econ­omy is go­ing to be. Each day the news doesn’t get bet­ter, it gets worse. It’s now has hit Main Street to a more sig­nif­i­cant de­gree.”

Stocks fell so fast on Wall Street at the open­ing bell that they trig­gered an au­to­matic, 15-minute trad­ing halt for the sec­ond time this week. The so­called cir­cuit break­ers were first adopted af­ter the 1987 crash, and un­til this week hadn’t been tripped since 1997.

The Dow briefly turned up­ward and halved its losses at one point in the af­ter­noon af­ter the Fed­eral Re­serve an­nounced it would step in to ease

“highly un­usual dis­rup­tions” in the Trea­sury market. But the burst of mo­men­tum quickly faded.

Trump of­ten points proudly to the big rise on Wall Street un­der his ad­min­is­tra­tion and warned a crowd at a rally last Au­gust that “whether you love me or hate, you gotta vote for me,” or else your 401(k) will go “down the tubes.”

Just last month, the Dow was boast­ing a nearly 50% gain since Trump took the oath of of­fice on Jan. 20, 2017. By Thurs­day’s close, the Dow was cling­ing to a 6.9% gain.

On Wed­nes­day, the Dow fin­ished the day down more than 20% from its all-time high, set just last month.

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