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US STOCKS-Wall St hammered as fears of virus-driven recession grow

Stock MarketsMar 16, 2020 17:06
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* Financial sector slumps on Fed's surprise rate cut
* Tech plummets as Apple, Microsoft weigh
* Retail stocks tumble as Nike, Lululemon to close U.S.
stores
* Energy stocks slump as oil prices fall below $30/barrel
* Indexes down: Dow 7.67%, S&P 6.83%, Nasdaq 6.75%

(Adds comment; updates prices)
By Sanjana Shivdas and Medha Singh
March 16 (Reuters) - U.S. stock indexes plunged about 7% on
Monday, as the Federal Reserve's drastic interest rate cut to
near zero stoked fears of a coronavirus-driven recession.
Trading on Wall Street's three main stock indexes was halted
for 15 minutes shortly after the open, the third such pause in
six days, as the S&P 500 index .SPX plunged 8%, triggering an
automatic cutout.
The benchmark index slid as much as 11.4%, shedding about $2
trillion in market value, before bargain hunting helped the
indexes claw back some losses.
A sharp cut in interest rates by the Federal Reserve ahead
of schedule and its pledge of massive asset purchases added to
the alarm about the pandemic that has paralyzed supply chains
and squeezed company revenue. "It's not just about a reduction in earnings growth, or that
you will have not have earnings growth. There's credit concerns
and cashflow concerns, that's why the Fed acted," said Tom
Martin, senior portfolio manager at GlobAlt Investments in
Atlanta.
"You have a lot of evidence that things are still in the
process of getting bad and we don't really know how bad."
Underscoring the economic blow of the outbreak, severe virus
containment measures sent China's factory production tumbling at
its fastest pace in three decades. Rate-sensitive financial stocks .SPSY plunged 9.3%,
leading declines among the major S&P sectors. The sector also
came under pressure after the big U.S. banks said they would
stop buying back shares. Energy stocks .SPNY tracked a near 10% slump in oil
prices, while technology stocks .SPLRCT shed 7.6%.
Apple Inc AAPL.O , Microsoft Corp MSFT.O and Facebook Inc
FB.O fell more than 7% each and were the biggest drags on the
S&P 500.
Wall Street's fear gauge .VIX jumped 17.24 points to
75.29.
As bars, restaurants, theaters and movie houses in New York
and Los Angeles were ordered shut, U.S. states pleaded with the
Trump administration to coordinate a national response to the
outbreak. The S&P 500 retail index .SPXTR fell 9.3% as Nike Inc
NKE.N , Lululemon Athletica Inc LULU.O and Under Armour Inc
UAA.N said they would close stores in the United States and
some other markets.
At 11:35 a.m. ET, the Dow Jones Industrial Average .DJI
was down 1,777.46 points, or 7.67%, at 21,408.16, the S&P 500
.SPX was down 185.29 points, or 6.83%, at 2,525.73. The Nasdaq
Composite .IXIC was down 531.40 points, or 6.75%, at 7,343.48.
Declining issues outnumbered advancers for an 11.97-to-1
ratio on the NYSE and an 8.07-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and 322 new lows,
while the Nasdaq recorded three new highs and 1,182 new lows.
Another 2,000-point drop for the Dow will wipe out the
entire Trump-bump, taking the index to levels seen before the
presidency of Donald Trump.
The S&P 1500 airlines index .SPCOMAIR slumped 8.1% as
United Airlines Holdings Inc's UAL.O March revenue fell $1.5
billion and the airline warned employees that planes could be
flying nearly empty into the summer.

US STOCKS-Wall St hammered as fears of virus-driven recession grow
 

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