Trading on Wall Street was halted on Monday after stocks had plunged immediately after the opening bell, despite the promise by the US Federal Reserve to provide more stimulus. The sell-off continued after trading resumed.
At one point, the S&P 500 and the Dow crashed more than ten percent due to a wave of panic selling. The Nasdaq Composite, comprising the biggest US tech companies, slid more than seven percent.
The sharp stock market fall triggered the so-called ‘circuit breaker’ trading halt, which lasted for 15 minutes. After the resumption of trade, the sell-off continued.
Bank stocks are among the biggest losers, with JPMorgan and Morgan Stanley down at least 17 percent. Airline stocks are also crashing amid forecasts that many will be bankrupt by May.
The news of this Wall Street crash has driven European shares down further, with the London FTSE 100 index falling 8.4 percent to 4,904.60 points – its lowest since October 11. France’s CAC 40 has nosedived more than 11 percent to 3,646.08, while the German DAX dropped by more than 10 percent to 8,277.20. Later in the day, European markets recovered some of their losses.
In response to the effects of the coronavirus on the global economy, the US Federal Reserve announced on Sunday that it plans to cut rates to zero and launch a massive $700-billion quantitative easing program to add liquidity to the markets.
“The Fed blasted its monetary bazooka for sure,” Peter Boockvar, chief investment officer at Bleakley Advisory Group told CNBC. “This better work because I don’t know what they have left, and no amount of money raining from the sky will cure this virus. Only time and medicine will.”
However, the Fed’s move failed to calm investor panic on Monday.
“The main problem this time [compared with] other market disruptions is the abrupt closure of economic activity,” said Dan Deming, managing director at KKM Financial. “The speed of the impact to middle America, let alone the global community, is relatively unprecedented,” he added.
For more stories on economy & finance visit RT’s business section