US STOCKS-Another black Monday as coronavirus response upends Wall Street

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* Financial sector slumps on Fed's surprise rate cut
* S&P 500 at 2018 low
* Impact of coronavirus pandemic still a question mark
* Indexes down: Dow 12.9%, S&P 500 12%, Nasdaq 12.3%

(Updates close with further details)
By Caroline Valetkevitch
NEW YORK, March 16 (Reuters) - Wall Street suffered its
biggest drop since the crash of 1987 on Monday after
unprecedented steps taken by the Federal Reserve, lawmakers and
the White House to slow the spread and blunt the economic hit of
the coronavirus failed to restore order to markets.
The S&P 500 tumbled 12%, closing at its lowest level since
December 2018, despite the Fed's surprise move late Sunday to
cut interest rates to near zero, its second emergency rate cut
in less than two weeks and ahead of a scheduled policy meeting
on Tuesday and Wednesday.
It was the third-largest daily percentage drop on record,
beaten only by the 1987 "Black Monday" rout and the crash of
October 1929.
That heightened alarm about the rapid spread of the pandemic
and how it has paralyzed parts of the global economy and
squeezed company revenue.
Investors appear increasingly worried about how effectively
policymakers will be able to mitigate the economic damage from
the spreading virus.
Stocks fell further late in the session as President Donald
Trump urged Americans to halt most social activities for 15 days
and not congregate in groups larger than 10 people, in a bold,
new effort to reduce the spread of the coronavirus in the United
States. "There's nothing that can really give us a sense of when the
full extent of the virus' impact will be known," said Jeffrey
Kleintop, chief global investment strategist at Charles Schwab.
Trump also said the United States may be heading into a
recession.
Most market watchers at this point are bracing for the
likelihood that the economy is headed for a recession, but they
said it is too early to know the full extent of the economic
downturn.
Investors also are not yet convinced that all the rushed,
panicked responses are gaining traction.
Bars, restaurants, theaters and movie houses in New York
and Los Angeles were ordered shut, and U.S. states pleaded with
the Trump administration to coordinate a national response to
the outbreak. Nike Inc NKE.N , Under Armour Inc UAA.N and others said
they would close stores in the United States and some other
markets.
The Dow Jones Industrial Average .DJI fell 2,997.1 points,
or 12.93%, to 20,188.52, the S&P 500 .SPX lost 324.89 points,
or 11.98%, to 2,386.13. The Nasdaq Composite .IXIC dropped
970.28 points, or 12.32%, to 6,904.59.
The S&P 500 lost $2.69 trillion in market capitalization for
the day, according to S&P Dow Jones Indices, and the index is
down 29.5% from its record high close on Feb. 19 and has
lost$8.28 trillion in that time, based on S&P Dow Jones data.
Trading on Wall Street's three main stock indexes was halted
for 15 minutes shortly after the open as the S&P 500 index
.SPX plunged 8%, crossing the 7% threshold that triggers an
automatic cutout.
The real estate sector .SPLRCR was the weakest out of the
S&P 500's 11 major sectors with a 16.5% dive, which was its
deepest one-day percentage drop since 2009. The smallest loser
was consumer staples .SPLRCS which sank 7% on the day.
The technology sector .SPLRCT fell 13.9%, which was a
record one-day decline for the sector that was the biggest
driver of the bull market.
The Cboe Volatility Index .VIX , known as "Wall Street's
fear gauge," ended the session at 82.69, its highest ever
closing level.
Jim Paulsen, chief investment strategist at the Leuthold
Group in Minneapolis, speaking of the VIX, said the market was
in "full panic mode."
"Until comfort returns, panic kind of dies down, I think we
are going to continue to have big moves," he said.
Despite the intense volatility, the markets should stay
open, the head of the U.S. securities regulator said, quashing
speculation that the government might shut down the country's
exchanges to stop the plunge in stock prices. Lance Pan, director of investment research and strategy at
Capital Advisors group in Newton Massachusetts, said that he was
trying to calm clients on Monday and noted the extra problems
people were having from working from home.
"We're flying blind and traders, even though they talk to
each other, they may not see the body language, they have kids
with them," he said.
Some 16.37 billion shares changed hands on U.S. exchanges
compared with the 13.51 billion average for the last 20
sessions.
Declining issues outnumbered advancing ones on the NYSE by a
14.68-to-1 ratio; on Nasdaq, a 11.64-to-1 ratio favored
decliners.
The S&P 500 posted no new 52-week highs and 341 new lows;
the Nasdaq Composite recorded three new highs and 1,477 new
lows.