US STOCKS-Wall St deepens historic slump as virus response comes up short

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

(Updates to close)
By Caroline Valetkevitch
NEW YORK, March 16 (Reuters) - Wall Street suffered its
biggest drop since 1987 on Monday, with the S&P 500 closing at
its lowest level since December 2018, as investors fear the
coronavirus pandemic is proving a tougher opponent than central
banks, lawmakers or the White House are currently capable of
battling.
The S&P 500 tumbled 12%, its biggest drop since "Black
Monday" three decades ago, despite the Federal Reserve's
surprise move late Sunday to cut interest rates to near zero,
its second emergency interest rate cut in less than two weeks
and ahead of its scheduled policy meeting on Tuesday and
Wednesday.
That added to alarm about the rapid spread of the pandemic
and how it has paralyzed parts of the global economy and
squeezed company revenue.
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 newly
aggressive effort to reduce the spread of the coronavirus in the
United States. "It's a market adrift with nothing to hold on to. 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 warned that a recession was possible.
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 may be expecting a fairly deep recession but are
just not sure how long it's going to last, Kleintop said.
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 and the Nasdaq Composite .IXIC dropped
970.28 points, or 12.32%, to 6,904.59.
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.