Live Coronavirus Stock Market Updates – The New York Times

Financial markets reeled again on Wednesday, as the coronavirus continued its relentless spread, governments ramped up efforts to contain it and investors continued to wait for lawmakers in Washington to take action on proposals to bolster the American economy.

The S&P 500 fell about 5 percent, stocks in Europe were sharply lower and oil prices cratered.

The selling on Wednesday reflected another extreme swing in sentiment on Wall Street. Stocks jumped on Tuesday as the White House called for urgent action to pump $1 trillion into the economy.

But the White House’s calls so far have not been met with tangible action in the Senate. Treasury Secretary Steven Mnuchin met with Republican lawmakers on Tuesday and warned them that the unemployment rate in the United States could approach 20 percent without the intervention of robust economic stimulus measures.

The Trump administration’s $1 trillion proposal includes two rounds of direct payments to Americans, one in April and one in May, at a total cost of $500 billion, according to a summary obtained by The New York Times on Wednesday.

The renewed selling showed how fragile any gains have become as long as the virus continues to spread and the number of cases continues to grow at a staggering rate. Analysts continue to downgrade their expectations for the global economy and corporate profits as measures to contain the virus become more extreme.

The turmoil on Wednesday was evident in other markets as well. The British pound fell to its lowest level in 35 years against the American dollar.

Rystad Energy, a consulting firm, said that supply of oil worldwide would exceed demand by about three million barrels a day in April as air travel and other transportation ground to a halt.

“With each day, there seems to be yet another trap door lying beneath oil prices, and we expect to see prices continue to roil,” said Louise Dickson, a Rystad analyst.

The American oil benchmark West Texas Intermediate dropped 24 percent to just over $21 a barrel, the lowest price since 2003.

The global Brent benchmark fell to just above $25 a barrel, a level just below January 2016. Oil prices are more than 60 percent below where they were at the beginning of the year.

The American economy is poised for the worst quarterly contraction ever, with a sudden slowdown in economic activity that is more akin to what happened in wartime Europe than during previous American slowdowns like the financial crisis more than a decade ago or even the Great Depression.

Greg Daco, chief U.S. economist at Oxford Economics, thinks the economy could shrink by 12 percent next quarter, with unemployment hitting 10 percent in April.

As it rose to record heights, the stock market had perhaps no bigger cheerleader than President Trump, who has seen the rally as an endorsement of his economic policies and crowed about the gains throughout his presidency.

But stocks have been falling for a month, and the severity of that drop has all but wiped out the gains that followed Mr. Trump’s inauguration. In intraday trading on Wednesday, the Dow Jones industrial average fell below its pre-inauguration closing level 19,732 before recovering slightly. The S&P 500, a better measure of the broader market, is still slightly above its pre-inauguration level.

Mr. Trump’s victory in 2016, along with the Republican Party’s control of Congress, set off a surge in share prices as investors looked forward to the prospect of steep cuts to corporate tax rates and an administration stocked with industry-friendly faces.

In December 2017, Mr. Trump delivered a sweeping tax overhaul. By the following month, the S&P 500 was up more than 30 percent, and the gains kept coming for much of the year. For Mr. Trump, this was a surefire barometer of his success as president.

There was one other nasty dip along the way: In late 2018, investors grew increasingly worried about Mr. Trump’s trade war with China and the prospect that the Federal Reserve would raise interest rates. But with the economy still growing, the job market strong, and the Fed reversing course on its plan to raise interest rates, the market overcame that dip and climbed nearly 30 percent.

Ford Motor and General Motors said on Wednesday that they would close their plants in the United States, Canada and Mexico until at least March 30, a decision that comes as automakers are under intense pressure to protect workers from the spreading coronavirus. Fiat Chrysler is planning to do the same, according to a person familiar with the matter.

Ford said in a statement that it would shut down factories after the end of Thursday evening shifts. G.M. quickly followed suit, saying it would stagger plant closings to “ensure that production stops in a safe and orderly fashion.”

“We have been taking extraordinary precautions around the world to keep our plant environments safe and recent developments in North America make it clear this is the right thing to do now,” G.M.’s chief executive, Mary Barra, said in a statement.

The company also said sales had been slowing, a trend it expects to continue as more people confine themselves to their homes to avoid contracting or spreading the virus.

The United Automobile Workers union has called on the three Detroit carmakers to shut down manufacturing plants across the United States for two weeks to prevent the spread of the coronavirus. The three automakers employ 151,000 U.A.W. members.

Europe’s auto manufacturing was brought virtually at a standstill after Daimler, Ford Motor and Nissan joined Volkswagen and most other major carmakers in shutting down.

Since World War II, the S&P 500 has entered a bear market — a drop of 20 percent from its peak — 12 times, including the one we are in. There have been as many recessions in that time.

However, not every bear market preceded a recession. The stock market isn’t an indicator of economic activity, and therefore isn’t necessarily a predictor of recessions.

But steep declines in the stock market have often coincided with a downturn in the economy. Of the bear markets that came before the current one, three occurred without a recession afterward.

President Trump said Wednesday that he would not drop tariffs on more than $360 billion worth of Chinese goods as part of an economic response to the virus, despite the urging of business groups who say the measure would help amid a pronounced economic slowdown.

“China’s paying us billions and billions of dollars in tariffs, and there’s no reason to do that,” Mr. Trump said. “China hasn’t asked me to do that.”

The Trump administration still maintains tariffs on more than $360 billion of Chinese goods, a legacy of a protracted trade war with China. On Wednesday, 160 businesses and organizations sent a letter to the president calling on him to suspend tariffs as part of his emergency measures to help the economy.

“This is an action that the administration can take today without waiting on authorization from Congress, and we urge President Trump to act without further delay,” said Jonathan Gold, the spokesman for Americans for Free Trade, which organized the letter.

The White House has discussed lifting tariffs as part of an economic response, but several officials have said no such move was being considered. In the last week, the administration has dropped tariffs on a few selective health care products that will be needed to treat patients with coronavirus, including face masks and gloves.

“I can’t imagine Americans asking for that,” Mr. Trump said Wednesday about lowering the tariffs. “But it could be that China will ask for a suspension or something. We’ll see what happens. China’s having a very rough times.”

The White House is asking Congress to allocate $500 billion for two separate waves of direct payments to American taxpayers in the coming weeks and an additional $300 billion to help small businesses continue to meet payroll, according to a Treasury Department proposal circulating on Capitol Hill and among lobbyists.

The outline, a copy of which was obtained by The New York Times, calls for a total of $1 trillion in spending for those programs, which would also include $50 billion for secured loans for the airline industry, and another $150 billion for secured loans or loan guarantees for other parts of the economy hard hit by the unfolding financial crisis.

It would allow for the use of the Exchange Stabilization Fund, an emergency reserve account that is usually used for intervening in currency markets, to cover those costs, and also temporarily allow it to guarantee money market mutual funds.

President Trump also invoked the Defense Production Act on Wednesday, giving the administration expanded powers to direct factories to produce face masks, gowns, gloves and other medical supplies needed to fight the virus.

The act, which stems from the Korean War, allows the government to commandeer American factories and direct them to produce items needed to protect national security. The law is typically thought of applying to weapons, tanks, uniforms and other military goods, but the administration will use it to force American factories to ramp up production of medical supplies like ventilators, respirators and other protective gear for health care workers.

Separately, the Federal Housing Finance Agency said it was directing Fannie Mae and Freddie Mac, the giant government-run mortgage finance firms, to suspend all foreclosures and foreclosure-related evictions for at least two months.

• In an opinion article published by The Financial Times, Ben S. Bernanke and Janet Yellen, who led the Fed through the 2008 financial crisis, suggested that the central bank should consider trying to buy corporate bonds as well. The idea is something that the current Fed chair, Jerome H. Powell, has said he is not pursuing.

• A Google spokeswoman said on Wednesday that the company was deferring performance reviews for the current period. The reason, according to a copy of the email announcement sent by Eileen Naughton, Google’s vice president of people operations, which was seen by The New York Times, was to help the internet company’s more than 100,000 workers focus on their “most important, mission-critical activities” during the coronavirus pandemic.

• ConocoPhillips said on Wednesday that it would cut its 2020 capital spending by $700 million, or about 10 percent. Late Tuesday, Halliburton, which provides drilling and related services to oil producers, said it would furlough 3,500 workers for 60 days.

• Delta Air Lines told employees on Wednesday that it would slash 70 percent of its flights until further notice in an effort to save more than $4 billion, according to a memo sent by the company’s chief executive, Ed Bastian. About 10,000 employees have already taken voluntary leave, he said, urging more to consider joining them.

• Verizon, AT&T and T-Mobile have all shut hundreds of stores, while keeping some open, in attempt to halt the spread of the coronavirus. All companies have cut back on retail hours with limited staffing. AT&T and T-Mobile said they would continue to pay their retail workers. Verizon did not comment on its employees.

Reporting and research were contributed by Jack Ewing, Ana Swanson, David McCabe, Cecilia Kang, Alan Rappeport, Ben Casselman, Davey Alba, Clifford Krauss, Sapna Maheshwari, Nicholas Fandos, Jim Tankersley, Amie Tsang, Kate Conger, Adam Satariano, Matthew Goldstein, Mike Isaac, Jason Gutierrez, Edmund Lee, Carlos Tejada, Kevin Granville, Daniel Victor and Nelson Schwartz.