Stock market news live: Stocks plunge, trigger circuit breaker after Fed unveils emergency stimulus – Yahoo Finance

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Markets are in for another rollercoaster week, as policymakers continue to ramp up their responses to the global coronavirus outbreak.

The S&P 500 opened more than 8% lower Monday morning, immediately triggering a 15-minute trading halt launched when an index fall more than 7% from the prior session’s close. The so-called “circuit breaker” is intended to prevent further immediate losses. But even after the halt lifted, the blue-chip index, Dow and Nasdaq each held sharply lower.

During the overnight session, futures for each index had also been pinned to their “limit-down” levels established by CME Group daily to prevent further extreme losses, after each dropping more than 4%.

The early volatility suggested the three major indices would add to declines that plunged them into a bear market just days ago, or more than 20% below their recent highs. The SPY ETF (SPY) tracking the S&P 500, which continued to trade during the pre-market session, suggested a drop of more than 9% by market open for the blue-chip index.

Specifically, the Fed slashed benchmark interest rates rates by 100 basis points to a band of between 0% and 0.25%. Underscoring the growing fears of a worldwide recession, the surprise announcement came just days ahead of the Fed’s scheduled March monetary policy meeting on Tuesday and Wednesday — and less than two weeks after the Fed had also unexpectedly cut rates by 50 basis points to a range of 1.00-1.25%.

Many market participants had expected the Fed would vote to cut rates to a zero lower bound for the first time since the financial crisis, but anticipated it would happen at this week’s meeting. The Fed will no longer hold its previously scheduled meeting, Fed Chair Jerome Powell said during a press conference Sunday evening.

In a statement, the central bank said it intends to maintain the new target interest rate band “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

The Fed also unleashed a further set of tools to address economic impacts arising from the COVID-19 pandemic, announcing a quantitative easing program that would include purchases of $700 billion in assets, comprising $500 billion worth of treasuries and $200 billion in agency-backed mortgage securities.

“The Fed is dusting off the financial crisis playbook, returning to bond buying, coordinating with other global central banks to provide access to U.S. dollar liquidity, cutting interest rates to zero and opening the Fed’s discount window to ensure the flow of credit through banks to consumers and businesses,” Greg McBride, Bankrate chief financial analyst, said in an email.

The Fed’s move deepens the monetary policy response to the COVID-19 outbreak, which has so far sickened more than 3,200 people in the U.S. as of Sunday afternoon, according to data from Johns Hopkins. Last week, the Fed had aggressively boosted its liquidity injections in repo operations by more than $1.5 trillion, and expanded its monthly purchases of Treasury securities to include those across all maturities.

The federal government too has stepped up its response to the coronavirus, with President Donald Trump on Friday announcing a waiver on federal student loan payments until further notice, and massive crude oil purchases by the Department of Energy to fill the U.S. Strategic Petroleum Reserve “to the top,” to aid shale producers hit by the recent slump in oil prices.

In Congress, the House of Representatives passed a bipartisan bill to help provide further support in response to the coronavirus. The legislative package, which passed with a vote of 363-40, broadens access to free testing, expands sick leave benefits and helps provides food aid for vulnerable populations, including children whose schools have closed due to the coronavirus.

The Senate is expected to vote on the bill this week, and could take it up as soon as Monday.

At the state level, the response has escalated with each passing day. New York Governor Andrew Cuomo announced Sunday that New York City’s public school system – the largest in the country comprising more than 1,800 schools – will begin closing this week in effort to slow the spread of the coronavirus. New York joins other states including California, Florida, Illinois, Louisiana, Pennsylvania, Rhode Island, Utah, Virginia, Alabama and Washington state in closing some or all public schools in recent days amid the outbreak.

New York City bars, cafes and restaurants will also be limited to offering takeout and delivery, effective Tuesday, Mayor Bill De Blasio said Sunday.

In California, Governor Gavin Newsom on Sunday called for the closure of all bars, nightclubs, wineries and brewpubs, and directed restaurants to slash their occupancy in half.

Countries outside the U.S. have instilled even more drastic measures to try and contain the outbreak. In Spain, individuals are now banned from leaving their homes except for work and purchasing food and medical supplies. Spain is the worst-hit European country for coronavirus deaths outside of Italy with a death toll of 289 as of Sunday, according to Johns Hopkins data. In France, another country facing a rising death toll from COVID-19, most shops, cafes, restaurants and movie theaters are temporarily closed.

U.S.-based companies have also increasingly announced retail closures in effort to encourage social distancing among consumers, and as states including California and New York announce bans on public gatherings of large numbers of people.

Nike (NKE) was one such company, announcing on Sunday that it will close all its Nike-owned stores in countries including in the United States, Canada, Western Europe, Australia, and New Zealand from March 16 through March 27. Peer retail giant Abercrombie & Fitch (ANF) also said it will be closing its stores outside of the Asia-Pacific region until March 28.

In another sweeping move by a major corporation, Apple (AAPL) said over the weekend it would be closing all of its retail stores outside of China until March 27. The announcement came just a day after the iPhone-maker reopened its stores in China, which had been closed for more than a month as COVID-19 spread across the country.

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12:12 p.m. ET: Fed to offer $500 billion in another overnight repurchase operation

The Federal Reserve said Monday it would be injecting hundreds of billions more in short-term funding to financial markets with another repurchase operation (repo).

The New York Fed intends to conduct an additional repo operation for same-day settlement today from 1:30 p.m. to 1:45 p.m. ET, “conducted for up to an aggregate offered amount of $500 billion with a minimum bid rate of 0.10%,” the New York Fed said in a statement.

Last week, the New York Fed had offered some $1.5 trillion in similar operations, intended to add liquidity to and ensure the smooth functioning of U.S. dollar money markets.

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11:51 a.m. ET: Wells Fargo sees U.S. economy entering a ‘sharp, albeit short-lived recession’

Wells Fargo economists said they expect U.S. economic activity will contract in the second and third quarters of 2020, thereby entering a recession with two consecutive quarters of negative growth.

The economists, led by Sam Bullard, said they expect second-quarter U.S. real gross domestic product to contract at an annualized pace of 3.3%, followed by a contraction of 2.3% in the third quarter. Such a result would bring full-year GDP down to just 0.5% growth, the weakest pace since 2009, according to the economists. Previously, the economists saw full-year 2020 GDP growth of 1.4%.

“We have updated our economic forecast and now project the U.S. economy to enter a sharp, albeit short-lived recession,” the economists said in a note.

“We look for GDP growth to slowly recover in the second half of the year, as the twin shocks dissipate (COVID-19 and oil prices) and in response to substantial fiscal stimulus,” they added. “The uncertainty around our forecast is much greater than normal. The path of the U.S. economy will largely depend on how the COVID-19 outbreak evolves, which is highly uncertain.”

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11:34 a.m. ET: Here’s which stocks are up as everything else crashes

Whether or not today’s trading session becomes the new ‘Black Monday’ remains to be seen, but certain stocks are actually posting gains amid the market’s carnage. Among the more notable names are:

  • Peloton (PTON): up over 2% after having hit a record low. New York, New Jersey and Connecticut’s joint action to shutter gyms boosted the at-home exercise company;

  • Clorox (CLX): Consumers newly-discovered obsession with germs (for obvious reasons) is boosting the household cleaning products giant. The stock is up over 4%;

  • Zoom (ZM) jumps by over 7%, with many white-collar workers working from home and needing to use video conferencing tools;

  • Moderna (MRNA), one of a handful of companies on the frontlines of developing a coronavirus vaccine, is spiking by nearly 20%.

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11:08 a.m. ET: Stocks pare some losses but still hold at least 7% lower

Here were the main moves in markets, as of 11:08 a.m. ET:

  • S&P 500 (^GSPC): 2,512.40, down 198.62 points or 7.33%

  • Dow (^DJI): 21,341.27, down 1,844.35 or -7.95%

  • Nasdaq (^IXIC): 7,295.55, down 579.32 or -7.36%

  • Crude (CL=F): $29.73 per barrel, down $2.00 or -6.3%

  • Gold (GC=F): $1,487.40 per ounce, off -$29.30 or -1.93%

  • 10-year Treasury (^TNX): yielding 0.851%, down 20.4 basis points

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10:43 a.m. ET: Supreme Court postpones oral arguments through March session due to coronavirus

The Supreme Court said Monday it will postpone oral arguments currently scheduled for the March session, “in keeping with public health precautions recommended in response to COVID-19,” according to a statement.

The postponement impacts oral arguments previously scheduled for March 23 to March 25, and March 30 to April 1. The U.S. Supreme Court building has been closed to the public since last week.

“The Court’s postponement of argument sessions in light of public health concerns is not unprecedented.  The Court postponed scheduled arguments for October 1918 in response to the Spanish flu epidemic,” according to the statement. “The Court also shortened its argument calendars in August 1793 and August 1798 in response to yellow fever outbreaks.”

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10:26 a.m. ET: NY Governor Andrew Cuomo announces joint action between New York, Connecticut and New Jersey to reduce spread of coronavirus

New York Governor Andrew Cuomo on Monday announced expanded efforts to help stem the spread of COVID-19, including further reductions of public crowd capacities and closures for more types of businesses.

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9:50 a.m. ET: S&P 500 extends losses to 11.4% after trading resumes

The S&P 500 tumbled again after trading resumed at the end of a 15-minute halt. At the lows of the session so far, the index was down as much as 11.4% to 2,401.57.

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9:36 a.m. ET: These are the S&P 500 levels to watch during Monday’s session to trigger further “circuit breakers”

The S&P 500 plummeted enough to invoke a trading halt just as markets opened for the regular cash session at 9:30 a.m. ET. This first halt, triggered after the index fell more than 7% from the prior session’s close, will last for 15 minutes.

Further trading halts will be triggered if the S&P 500 falls to the following levels once trading resumes:

  • Level 2: 2,358.58 (13% drop from Friday’s close) – 15 minute halt

  • Level 3: 2,168.81 (20% drop from Friday’s close) – trading will close for the rest of Monday’s regular session

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9:30 a.m. ET: S&P 500 opens more than 8% lower, triggering trading halt

The S&P 500 sank more than 8% just as markets opened for trading, immediately triggering a 15-minute “circuit breaker” trading halt on the New York Stock Exchange intended to prevent further extreme losses.

Here were the main moves in markets, as of 9:30 a.m. ET:

  • S&P 500 (^GSPC): 2,490.47, down 220.55 points or -8.14%

  • Dow (^DJI): 20,935.16, down 2,250.46 or -9.71%

  • Nasdaq (^IXIC): 7,392.73, down 482.15 or -6.12%

  • Crude (CL=F): $28.96 per barrel, down $2.77 or -8.73%

  • Gold (GC=F): $1,461.30 per ounce, off -$55.40 or -3.65%

  • 10-year Treasury (^TNX): yielding 0.753%, down 20.4 basis points

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9:15 a.m. ET: Goldman Sachs sees risk of S&P 500 slumping to 2,000 before recovering

via Julia La Roche, Yahoo Finance Correspondent

Goldman Sachs sees potential for the S&P 500 (^GSPC) to drop to 2,000, down 41% from the all-time high, before rebounding to end 2020 at 3,200 as the impact of the coronavirus (COVID-19) roils markets.

“The swiftness of the bear market has unsettled many young market participants,” Goldman’s chief equity strategist David Kostin wrote in a note on March 13. “In contrast, veteran investors recalled the rout of Black Monday (October 19, 1987) – when stock prices collapsed by more than 20% in a single day. The lesson of prior event-driven bear markets is that financial devastation ultimately allows a new bull market to be born.”

Last week after an 11-year bull market run, the Dow Jones Industrial Average (^DJI) officially entered a bear market, marked by a 20% drop from its most recent high.  The S&P fell into a bear market the following day.

READ MORE

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9:09 a.m. ET: New York Fed manufacturing survey shows early impact of COVID-19 outbreak on U.S. economy

The New York Federal Reserve’s monthly manufacturing survey showed a much sharper than expected decline in business conditions in March, underscoring the coronavirus’s early impact on the domestic economy.

The headline business conditions index slumped 34 points to -21.5, hitting the lowest level since 2009. Consensus economists had expected the print to come in at 4.9, according to Bloomberg data.

Beneath the headline index, the new orders index sank to -9.3 and the shipments index fell to -1.7, as delivery times lengthened and inventories rose. Employment flattened out and the average hours worked per week fell, according to the New York Fed.

“Optimism about the six-month outlook fell sharply, with firms less optimistic than they have been since 2009,” the regional Fed said in a statement.

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7:52 a.m. ET: Asia stocks tumble after China data points to deeper than expected economic contraction during outbreak

Stocks in Asia were sharply lower Monday, with the Shanghai Composite down 3.4% and Hang Seng Index down 4% during the session after data from China revealed deeper than expected contractions in the country’s key industries amid the coronavirus outbreak.

China’s industrial output slumped 13.5% for the January through February period, according to the National Bureau of Statistics, coming in well below the decline of just 3.0% expected, according to Bloomberg data. This was the weakest reading since January 1990, according to Reuters.

Retail sales for the first two months of the year slid 20.5%, versus a decline of 4.0% expected. And fixed asset investment was similarly week, dropping 24.5% versus a drop of 2.0% expected.

The unemployment rate in the country surged to 6.2% in February, the highest reading on record, as millions lost their jobs due to the COVID-19 outbreak and ensuing business disruptions. The unemployment rate in China was 5.2% in January.

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7:00 a.m. ET Monday: S&P 500, Dow and Nasdaq contracts stay pinned to “limit down”

Futures for each of the three major indices languished at their lower-bound limits in early trading, suggesting investors were in for another session of heavy selling Monday.

Here were the main moves in markets, as of 7:00 a.m. ET Monday morning:

  • S&P 500 futures (ES=F): 2,567.50, down 128.5 points or -4.77%

  • Dow futures (YM=F): 21,947.00, down 1,041.00 points or -4.53%

  • Nasdaq futures (NQ=F): 7,556.00, down 359.75 points or -4.54%

  • Crude oil (CL=F): $29.94 per barrel, down $1.79 or 5.64%

  • Ten-year Treasury note: yielding 0.786%, down 16.8 basis points

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6:01 p.m. ET Sunday: Stock futures sink after Fed cuts rates to zero

Stock futures sank at the start of overnight trading, showing few signs of respite from selling even after the Federal Reserve’s unexpected rate cut.

Here were the main moves in markets, as of 6:01 p.m. ET:

  • S&P 500 futures (ES=F): 2,598.00, down 86 points or -3.2%

  • Dow futures (YM=F): 22,289.00, down 550 points or -2.4%

  • Nasdaq futures (NQ=F): 7,628.5, down 272.25 points or -3.45%

Traders work during the opening bell at the New York Stock Exchange (NYSE) on March 13, 2020 at Wall Street in New York City. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

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