US STOCKS-Wall St sinks as Fed's shock cut increases worries over virus spread

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* Financial sector slumps on Fed's surprise rate cut
* Retail stocks tumble as Nike, Lululemon to close U.S.
stores
* Energy stocks plunge as oil prices fall below $30/barrel
* Indexes down: Dow 9.6%, S&P 500 9.1%, Nasdaq 9.2%

(Updates to late afternoon)
By Caroline Valetkevitch
NEW YORK, March 16 (Reuters) - U.S. stocks fell sharply on
Monday as the Federal Reserve's drastic move to cut interest
rates to near zero fueled anxiety over the extent of economic
damage from the coronavirus pandemic.
The Fed's second emergency interest rate cut in less than
two weeks and its pledge to purchase more than $700 billion in
assets came late on Sunday, ahead of its scheduled policy
meeting on Tuesday and Wednesday. It added to the alarm about
the pandemic that has paralyzed parts of the global economy and
squeezed company revenue. Investors are worried over how effectively policymakers will
be able to mitigate the economic damage from the spreading
virus. The market is down despite the Fed's move because "this is a
different type of crisis. Lower rates will not create demand
when people are home," said Solita Marcelli, deputy chief
investment officer for the Americas at UBS Global Wealth
Management.
"But this doesn't mean what the Fed has done is futile.
Lower rates are a precondition to other policies," she said. "So
I think this has to be done, but it's understandable the way the
market is reacting."
The benchmark index slid as much as 11.4% early in the
session, shedding about $2 trillion in market value, before
bargain-hunting helped the main indexes claw back some losses.
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.
Rate-sensitive financial stocks .SPSY tumbled more than
11%, leading declines among the major S&P sectors. The sector
also came under pressure after the big U.S. banks halted their
share buy-backs. Energy stocks .SPNY also fell sharply along with oil
prices, and the S&P 500 technology index .SPLRCT was down more
than 9%.
Heavyweights Apple Inc AAPL.O , Microsoft Corp MSFT.O and
Facebook Inc FB.O were among the biggest drags on the S&P 500.
The Dow Jones Industrial Average .DJI fell 2,120.11
points, or 9.14%, to 21,065.51, the S&P 500 .SPX lost 233.51
points, or 8.61%, to 2,477.51 and the Nasdaq Composite .IXIC
dropped 710.35 points, or 9.02%, to 7,164.52.
Wall Street's fear gauge .VIX jumped 21.15 points to
78.98.
The markets should stay open despite the intense volatility,
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. 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 , Lululemon Athletica Inc LULU.O and Under
Armour Inc UAA.N said they would close stores in the United
States and some other markets, dragging the S&P 500 retail index
.SPXRT sharply lower.
The S&P 1500 airlines index .SPCOMAIR slumped after United
Airlines Holdings Inc UAL.O booked $1.5 billion less revenue
in March and warned employees that planes could be flying nearly
empty into the summer. Adding to worries, severe virus containment measures sent
China's factory production tumbling at its fastest pace in three
decades. Declining issues outnumbered advancing ones on the NYSE by a
13.72-to-1 ratio; on Nasdaq, a 11.32-to-1 ratio favored
decliners.
The S&P 500 posted no new 52-week highs and 332 new lows;
the Nasdaq Composite recorded 3 new highs and 1,321 new lows.