Wall Street witnessed one of its worst day in history on Monday as coronavirus strengthened its grip threatening of a possible global recession in the near term. All three major stock indexes plunged by 12% or more in a single-day as market participants started panic selling with no clue of when the effect of this virus will come to an end.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plummeted 12.9% or 2,997.10 points to close at 20,188.52. This was the blue-chip index’s third-worst single-day performance and its lowest point since 2017. The S&P 500 tumbled 12% or 324.89 points to close 2,386.13. This was the benchmark index’s lowest level since December 2018. Meanwhile, the Nasdaq Composite Index closed at 6.904.59, plunging 12.3% or 970.28 points. This was the tech-laden indexes worst single-day performance and lowest close since December 2018.
All 30 components of the Dow finished in the red. Similarly, all 11 broad sectors of the S&P 500 ended in the red. The Real Estate Select Sector SPDR (XLRE), the Technology Select Sector SPDR (XLK) and the Financials Select Sector SPDR (XLF) tanked 16%, 13.8% and 137%, respectively.
For the Nasdaq Composite, the sole gainer was American Airlines Group Inc. (AAL - Free Report) with a gain of 11.3%. American Airlines Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
After Monday’s losses, the Dow is currently 31.7% below its all-time high. Meanwhile, the S&P 500 and the Nasdaq Composite are more than 29% below their all-time highs recorded last month. Notably, the Dow fell to its lowest point since 2017. Year to date, these indexes have lost 29.3%, 26.1% and 23.1%, respectively.
A total of 16.37 billion shares were traded Monday, higher than the last 20-session average of 13.51billion. The COBE VIX — popularly known as the best fear gauge of Wall Street — surged 43% to record a new all-time high of 82.69, surpassing its previous peak level of 80.74 posted on Nov 21, 2008.Decliners outnumbered advancers on the NYSE 14.68-to-1 ratio. On Nasdaq,11.64-to-1 ratio favored declining issues.
Stimulus Measures Fail to Deliver
On Mar 15, in an unprecedented move, the Fed cut the benchmark lending rate by 1% point to a range of 0-0.25% from 1-1.25%. Notably, on Mar 3, the central bank cut the Fed fund rate by 50 basis points. This means, within two-weeks, the Fed cut interest rate by 1.5% as an emergency monetary stimulus. Moreover, the Fed has initiated a massive $700 billion quantitative easing program to inject liquidity in the system. Last week, the Fed has announced to unveil $1.5 trillion repo program to stabilize market mayhem.
On the other hand, Pre4sident has signed a $8.3 billion emergency relief package to fight coronavirus outbreak. The government had also decided to introduce another $50 billion package for emergency purposes and is reported to mulling introducing 0% payroll tax rate for the rest of this year.
However, the market ignored all stimulus after President hinted that the country may succumb to r4ecession this year. Several economists and financial experts have warned that extreme volatility may likely to continue so far the coronavirus’s impact marginalized.
Stocks That Made Headline
Oil E&Ps on Capex Cut Spree: Whiting Petroleum to Follow Suit
Shares of Whiting Petroleum Corp. (WLL - Free Report) declined 40% in pre-market trading yesterday following the announcement of its capital budget cut.However, this independent explorer and producer of oil and natural gas, which is grappling with the oil price rout at the moment, recovered later to end the day at 5.4% gain. (Read More)
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