US STOCKS-Wall St hammered as fears of virus-driven recession grow

  • Reuters
  • Stock Market News
US STOCKS-Wall St hammered as fears of virus-driven recession grow
Credit: © Reuters.

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* Financial sector slumps on Fed's surprise rate cut

* Tech plummets as Apple, Microsoft weigh

* Retail stocks tumble as Nike , Lululemon to close U.S. stores

* Energy stocks slump as oil prices fall below $30/barrel

* Indexes down: Dow 7.67%, S&P 6.83%, Nasdaq 6.75% (Adds comment; updates prices)

By Sanjana Shivdas and Medha Singh

March 16 (Reuters) - U.S. stock indexes plunged about 7% on Monday, as the Federal Reserve's drastic interest rate cut to near zero stoked fears of a coronavirus-driven recession.

Trading on Wall Street's three main stock indexes was halted for 15 minutes shortly after the open, the third such pause in six days, as the S&P 500 index .SPX plunged 8%, triggering an automatic cutout.

The benchmark index slid as much as 11.4%, shedding about $2 trillion in market value, before bargain hunting helped the indexes claw back some losses.

A sharp cut in interest rates by the Federal Reserve ahead of schedule and its pledge of massive asset purchases added to the alarm about the pandemic that has paralyzed supply chains and squeezed company revenue. not just about a reduction in earnings growth, or that you will have not have earnings growth. There's credit concerns and cashflow concerns, that's why the Fed acted," said Tom Martin, senior portfolio manager at GlobAlt Investments in Atlanta.

"You have a lot of evidence that things are still in the process of getting bad and we don't really know how bad."

Underscoring the economic blow of the outbreak, severe virus containment measures sent China's factory production tumbling at its fastest pace in three decades. financial stocks .SPSY plunged 9.3%, leading declines among the major S&P sectors. The sector also came under pressure after the big U.S. banks said they would stop buying back shares. stocks .SPNY tracked a near 10% slump in oil prices, while technology stocks .SPLRCT shed 7.6%.

Apple Inc AAPL.O , Microsoft Corp MSFT.O and Facebook Inc FB.O fell more than 7% each and were the biggest drags on the S&P 500.

Wall Street's fear gauge .VIX jumped 17.24 points to 75.29.

As bars, restaurants, theaters and movie houses in New York and Los Angeles were ordered shut, U.S. states pleaded with the Trump administration to coordinate a national response to the outbreak. S&P 500 retail index .SPXTR fell 9.3% as Nike Inc (NYSE: NKE ) NKE.N , Lululemon Athletica Inc LULU.O and Under Armour Inc (NYSE: UAA ) UAA.N said they would close stores in the United States and some other markets. 11:35 a.m. ET, the Dow Jones Industrial Average .DJI was down 1,777.46 points, or 7.67%, at 21,408.16, the S&P 500 .SPX was down 185.29 points, or 6.83%, at 2,525.73. The Nasdaq Composite .IXIC was down 531.40 points, or 6.75%, at 7,343.48.

Declining issues outnumbered advancers for an 11.97-to-1 ratio on the NYSE and an 8.07-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 322 new lows, while the Nasdaq recorded three new highs and 1,182 new lows.

Another 2,000-point drop for the Dow will wipe out the entire Trump-bump, taking the index to levels seen before the presidency of Donald Trump.

The S&P 1500 airlines index .SPCOMAIR slumped 8.1% as United Airlines Holdings Inc's UAL.O March revenue fell $1.5 billion and the airline warned employees that planes could be flying nearly empty into the summer.

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