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US STOCKS-Wall Street clobbered as crude plummets, virus crisis deepens

Published 09/03/2020, 23:50
Updated 09/03/2020, 23:54
© Reuters.  US STOCKS-Wall Street clobbered as crude plummets, virus crisis deepens
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(Updates with drop in S&P 500 futures)

* S&P 500 posts its worst day since December 2008

* Crude prices in biggest drop since 1991 Gulf War

* Energy shares post largest-ever one-day drop

* Indexes down: Dow 7.74%, S&P 7.59%, Nasdaq 7.29%

By Stephen Culp

NEW YORK, March 9 (Reuters) - Wall Street suffered its

biggest one-day loss since the 2008 financial crisis on Monday

and recession worries loomed large as tumbling oil prices and

ongoing coronavirus fears prompted investor panic on the

anniversary of the U.S. stock market's longest-ever bull run.

All three major U.S. stock averages plunged sharply at the

opening bell, triggering trading halts put in place in the wake

of 1987's "Black Monday" crash. The Dow plummeted a record 2,000

points out of the starting gate on a day that marked the current

bull market's 11th year.

S&P 500 futures declined about 1% after the bell, briefly

extending their loss to just over 20% from their record high on

Feb. 19 and suggesting the bull market may have ended. Investors

generally consider a drop of 20% from a recent high to signify a

bear market, raising the expectations of a drawn out period of

negative sentiment.

"There's a lot of fear in the market and if the price of oil

continues to move lower it's an indication that a global

recession is not far away," said Peter Cardillo, chief market

economist at Spartan Capital Securities in New York.

The CBOE Volatility index .VIX , a gauge of investor

anxiety, touched its highest level since December 2008.

Benchmark 10-year U.S. Treasury yields briefly sank to

0.318%, a record low. The sell-off began over the weekend when an oil supply pact

between Saudi Arabia and Russia collapsed and both countries

vowed to hike production amid weakening global demand due to

the coronavirus and signs of an economic slowdown. Oil prices registered their biggest one-day fall since the

1991 Gulf war, with Brent crude futures LCOc1 closing down

23.88% and front-month WTI falling 25.1%. That sent the S&P

Energy index .SPNY sliding 20.1%, its largest one-day drop on

record. Global markets were already on edge as worldwide confirmed

cases of COVID-19 surged past 110,000, causing widespread supply

disruption and large-scale quarantine measures as governments

scramble to contain the outbreak.

The Dow Jones Industrial Average .DJI fell 2,013.76

points, or 7.79%, to 23,851.02, the S&P 500 .SPX lost 225.81

points, or 7.60%, to 2,746.56 and the Nasdaq Composite .IXIC

dropped 624.94 points, or 7.29%, to 7,950.68.

All 11 major sectors of S&P 500 ended the session deep in

red territory, with energy and interest rate-sensitive financial

.SPSY stocks suffering the largest percentage losses.

Boeing Co BA.N was the biggest drag on the Dow, tumbling

13.4% following the Federal Aviation Administration's (FAA)

rejection of the planemaker's proposal regarding wiring systems

in place on its grounded 737 MAX aircraft. Apple Inc AAPL.O shares fell 7.9% after data showed the

company sold fewer than 500,000 smartphones in China in February

amid the coronavirus crisis. Chipmakers registered their largest drop since October 2008,

with the Philadelphia SE Semiconductor index .SOX falling

8.3%.

Declining issues outnumbered advancing ones on the NYSE by a

17.86-to-1 ratio; on Nasdaq, a 19.11-to-1 ratio favored

decliners.

The S&P 500 posted one new 52-week high and 229 new lows;

the Nasdaq Composite recorded nine new highs and 1,049 new lows.

Volume on U.S. exchanges was 17.22 billion shares, compared

with the 11.05 billion average over the last 20 trading days.

S&P energy relative to S&P 500 vs crude https://tmsnrt.rs/38RxTL9

US crude price vs energy sector ETF https://tmsnrt.rs/2TPLlcD

Plunging oil, coronavirus stoke credit concerns https://tmsnrt.rs/2TBKldj

Energy sector's rough 2020 https://tmsnrt.rs/2PZC0hq

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