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* Futures down: Dow 4.87%, S&P 4.89%, Nasdaq 4.82%
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By Medha Singh
March 9 (Reuters) - U.S. stock index futures plunged 5% on
Monday to hit a daily trading limit, as global recession fears
were amplified by a 25% slump in oil prices and the relentless
march of the coronavirus across the United States and Europe.
The Dow Jones Industrials index .DJI was set to fall more
than 1,300 points at the open as crude oil logged its worst day
in almost three decades after a price war between Saudi Arabia
and Russia. O/R
Oil majors Chevron Corp CVX.N and Exxon Mobil Corp XOM.N
tumbled about 15%. All 30 components of the blue-chip Dow were
in the red.
"You will now have pain on oil producers and on investment,
and you won't have an uptick in consumer spending because they
aren't comfortable because of the virus concerns," said Simon
MacAdam, global economist at Capital Economics.
"It's probably a net negative for the world economy that oil
prices have fallen."
A dip in oil prices is generally considered positive for
global growth, but concerns about the economic damage from the
virus outbreak have sparked a worldwide sell-off that has erased
about $3.5 trillion from the value of companies listed on the
benchmark S&P 500 .SPX . MKTS/GLOB
The health crisis, which has now infected more than 110,000
people globally, has crippled supply chains and prompted cuts to
global growth forecasts for 2020. "Our baseline expectation is of a mild recession and this
(the coronavirus and oil price crash) is a reality check, which
is allowing investors to reassess the situation," said Bas van
Geffen, quantitative analyst at Rabobank in Amsterdam.
Traders are now expecting the Federal Reserve to again cut
interest rates next week after an emergency reduction on March
The yield on benchmark 10-year U.S. Treasury US10YT=RR was
on course for its biggest one-day fall in almost a decade,
sending shares of rate-sensitive U.S. banks including Citigroup
Inc C.N , Bank of America Corp BAC.N and JPMorgan Chase & Co
JPM.N down between 9% and 12%. US/
Marathon Oil Corp MRO.N , Devon Energy Corp DVN.N , Apache
Corp APA.N , Pioneer Natural Resources Co PXD.N slipped
between 25% and 34% and were some of the biggest losers among
S&P 500 components.
At 7:59 a.m. ET, Dow e-minis 1YMcv1 were down 1,255
points, or 4.87%. S&P 500 e-minis EScv1 were down 145 points,
or 4.89% and Nasdaq 100 e-minis NQcv1 were down 410 points, or
4.82%.
The selling pressure overnight on futures set off a downward
limit of 5% set by exchange operator CME Group.