Gold bars to be exempt from tariffs, White House clarifies
(Updates to market close)
* Fed to lend against student loans, repurchase Treasuries
* More states under lockdown
* Goldman Sachs sees 24% plunge in 2nd-qtr U.S. real GDP
* Indexes end: Dow -3.12%, S&P 500 -2.96%, Nasdaq -0.27%
By Noel Randewich
March 23 (Reuters) - Wall Street's slide deepened on Monday
as the rapidly spreading coronavirus forced more U.S. states
into lockdown, overshadowing unprecedented moves by the U.S.
Federal Reserve to shore up credit across the economy.
After recently cutting interest rates to near zero, the Fed
will now lend against student loans and credit card loans, as
well as back the purchase of corporate bonds and make direct
loans to companies. Announcement of the extraordinary measures briefly lifted
U.S. stock index futures before Monday's trading session began,
but the mounting death toll from COVID-19 and a tide of
lockdowns more U.S. states quickly sent the main indexes into
the red, putting the S&P 500 .SPX on pace for its worst month
since World War Two.
"What the Fed did is important because it does help in the
credit markets. But it's not enough from an equity market
perspective," said Willie Delwiche, investment strategist at
Robert W. Baird in Milwaukee. "What we now need is leadership
out of Congress to pass some sort of stimulus bill, because what
the Fed's doing is relieving some problems, but it doesn't do
enough to solve to solve what's out there."
Investors had hoped the U.S. Senate would clear a $1
trillion-plus coronavirus stimulus package over the weekend, but
Democrats and Republicans were still scrambling to come to an
agreement. Maryland, Ohio, Louisiana and Delaware joined New York and
California in asking people to stay home, foreshadowing a near
halt in economic activity and more pain for U.S. equities, and
prompting several analysts to slash their growth forecasts.
Goldman Sachs expects an outright contraction in global real
gross domestic product in 2020 on the back of a 24% plunge in
U.S. real GDP in the second quarter: two-and-a-half times as
large as the previous post-war record. The S&P 500 has experienced a $9 trillion wipeout to its
value since the benchmark index hit a record high last month. A
rush for safe-haven assets like government bonds caused U.S.
Treasury yields to fall on Monday. The S&P 500 is down about 34% from its February record high,
its lowest level since fears of the coronavirus swept across
Wall Street.
The Dow Jones Industrial Average .DJI dropped 3.12% to end
at 18,576.04 points, while the S&P 500 .SPX lost 2.96% to
2,236.7. The Nasdaq Composite .IXIC dropped 0.27% to 6,860.67,
its overall decline cushioned by a 3.07% rise in Amazon.com
AMZN.O .
"What we really need to turn things around is a sense of
closure - not on the virus, but on the response to the virus,"
said Stephen Massocca, senior vice president at Wedbush
Securities in San Francisco. "Once the market sees that, I think
the market will rebound considerably."
Declining issues outnumbered advancing ones on the NYSE by a
3.18-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 224 new lows;
the Nasdaq Composite recorded two new highs and 525 new lows.