Wall Street is in for another wild week if Monday morning is any indication.
Trading on the New York Stock Exchange was halted almost immediately on the opening bell after U.S. stocks opened sharply lower. The S&P 500 tripped a "circuit breaker" after it dropped 8.1%. The Dow Jones Industrial Average didn't fare any better - it opened down 9.7%, or 2,250 points, lower. The Nasdaq also fell by 6.1%. Investors are searching for safe havens after concerns that emergency policy measures put out by global central banks over the weekend have done little to settle nerves that the global economy can handle the rapidly spreading coronavirus.
In an effort to calm the markets, the Federal Reserve on Sunday cut interest rates to near-zero for the first time since the 2008 financial crisis and announced it was launching a new round of quantitative easing and would purchase $700 billion worth of asset purchases entailing Treasury and mortgage-backed securities.
However, the rate cut and QE announcement that was meant to soothe investors' nerves appears to have done the opposite. Investors were also confronted with disappointing news from the world's two largest economies after Chinese officials announced retail sales, manufacturing activity and investment in the first two months of the year dropped far more than economists expected and a gauge of manufacturing activity in New York dropped to its lowest level in more than ten years.
Oil prices also continued their free fall as the price of a barrel of oil dropped to $29 in early morning trading. Trump said Friday that the U.S. would buy enough oil to replenish the Strategic Petroleum Reserve.
Wall Street resumed trading at 9:45 a.m. ET, with stocks continuing to drop. Should an index drop by 13%, a second 'circuit breaker will be activated. If the index falls by 20%, trading is stopped for the day.
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