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* Trump's Europe travel curbs slam world markets
* VIX touches highest level since financial crisis
* Boeing set for worst week in history
* Indexes sink: Dow 7.87%, S&P 7.34%, Nasdaq 7.11%
(Updates to afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, March 12 (Reuters) - Crashing U.S. stocks on
Thursday confirmed Wall Street is in a bear market after new
travel restrictions to curb the coronavirus spread spooked
investors and rattled world markets.
President Donald Trump's Europe travel ban announced late
Wednesday sent all three major U.S. stock indexes into a
tailspin, slamming the book on the longest-running U.S. bull
market on record.
The benchmark S&P 500 and the Nasdaq have lost about 24% of
their value since reaching record closing highs just 16 sessions
ago, as nations around the world grapple with how to contain the
fast-moving coronavirus and its economic effects.
A bear market is confirmed when an index sinks 20% or more
below its most recent closing high.
"It's the fastest 20% decline ever," said Paul Nolte,
portfolio manager at Kingsview Asset Management in Chicago.
"Every day there's more selling and just when you think you're
at capitulation, you're not there yet. People don't know how
long this is going to go on so they're going to sell and walk
away."
Trump's sweeping travel restrictions, limiting flights from
continental Europe to the United States, sent European shares
.STOXX to a near four-year low and slammed airline stocks,
already battered by the spread of COVID-19. Airlines .SPCOMAIR were down 15.7%.
Boeing Co BA.N fell another 12.5% as J.P.Morgan abandoned
its long-term backing for the company's shares, setting the
planemaker on course for its worst week ever.
The U.S. Federal Reserve is expected to cut interest rates
for the second time this month at the conclusion of its two-day
monetary policy scheduled for next week.
U.S. Treasury yields tumbled as anticipation grew for
aggressive easing on the part of the Fed. The U.S. stock market briefly pared its losses - before
resuming its decline - after the New York Federal Reserve
announced it would introduce $1.5 trillion in new repo
operations this week. "Any government action that has dollars tied to it that's
actionable for the banking system would be viewed as a
positive," said Joseph Sroka, chief investment officer at
NovaPoint in Atlanta. "But what the market is looking for is
tangible evidence that the government is trying to stave off a
recession."
Interest rate-sensitive bank shares .SPXBK were down
10.0%.
Corporate credit worries hit bond fund prices as companies
began to draw on credit lines. The CBOE Volatility index .VIX , a gauge of investor
anxiety, shot up to levels not seen since November 2008, the
height of the financial crisis.
The Trump travel ban also hit oil prices, sending
front-month Brent crude down 7.4%. Oil prices were already under
pressure after Saudi Arabia and Russia vowed to boost
production, flooding the market with supply despite plummeting
demand. The S&P 500 Energy index .SPNY was down 10.3%
The Dow Jones Industrial Average .DJI fell 2,005.08
points, or 8.51%, to 21,548.14, the S&P 500 .SPX lost 216.55
points, or 7.90%, to 2,524.83 and the Nasdaq Composite .IXIC
dropped 613.95 points, or 7.72%, to 7,338.10.
All 11 major sectors of the S&P 500 were trading sharply
lower.
Declining issues outnumbered advancing ones on the NYSE by a
22.16-to-1 ratio; on Nasdaq, a 15.18-to-1 ratio favored
decliners.
The S&P 500 posted no new 52-week highs and 327 new lows;
the Nasdaq Composite recorded 3 new highs and 1,485 new lows.