Dow plunges over 2,000 points, oil collapses amid price war and coronavirus
The steep stock selloff prompted rare trading halts
U.S. equity markets tumbled Monday after an oil price war broke out between Saudi Arabia and Russia and amid new cases of coronavirus, especially in America.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 43870.35 | +461.88 | +1.06% |
| SP500 | S&P 500 | 5948.71 | +31.60 | +0.53% |
| I:COMP | NASDAQ COMPOSITE INDEX | 18972.420086 | +6.28 | +0.03% |
The Dow Jones Industrial Average closed over 2,000 points lower, coming back from a point drop of more than 2,150 points, or 8.2 percent, at session lows while the S&P 500 and Nasdaq Composite were lower by 7.9 percent and 7.2 percent, respectively.
The drop is now the worst one-day point decline ever for the Dow.
Monday's sharp selloff, which caused the major averages to be temporarily halted due to volatility, caused the New York Federal Reserve to increase its daily cash injections into the banking system to $150 billion from $100 billion.
The stock-market's steep slide comes after a production dispute between OPEC members, led by Saudi Arabia, and Russia sent West Texas Intermediate crude oil, the U.S. benchmark, plunging by as much as 33.8 percent, the most since the outbreak of the 1991 Persian Gulf War, to a low of $27.34 a barrel in overnight trading. The energy component finished the day down 24.59 percent at $31.13 a barrel.
Oil majors, including Exxon Mobil, Chevron, and BP, were sharply lower, as were service providers Haliburton and Schlumberger.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XOM | EXXON MOBIL CORP. | 121.91 | +1.56 | +1.30% |
| CVX | CHEVRON CORP. | 161.63 | +0.33 | +0.20% |
| BP | BP PLC | 29.53 | +0.46 | +1.56% |
| HAL | HALLIBURTON CO. | 31.87 | +0.67 | +2.15% |
| SLB | SCHLUMBERGER LTD. | 44.06 | +0.53 | +1.22% |
Elsewhere, travel-related names remained under pressure after Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, warned Americans with underlying conditions not to take long plane trips or cruises due to the new coronavirus outbreak.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAL | AMERICAN AIRLINES GROUP INC. | 14.20 | -0.26 | -1.80% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 94.40 | -0.23 | -0.24% |
| DAL | DELTA AIR LINES INC. | 63.34 | -0.28 | -0.45% |
| CCL | CARNIVAL CORP. | 25.34 | +0.25 | +1.00% |
| EXPE | EXPEDIA GROUP INC. | 183.51 | +4.41 | +2.46% |
Drugmakers working on treatments for COVID-19, including Inovio Pharmaceuticals and BioCryst Pharmaceuticals, opened sharply higher before turning lower.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| INO | INOVIO PHARMACEUTICALS | 4.06 | +0.09 | +2.27% |
| BCRX | BIOCRYST PHARMACEUTICALS INC. | 7.49 | +0.19 | +2.60% |
U.S. Treasurys were the beneficiary of the flight to safety with heavy buying pushing longer-dated yields lower by more than 30 basis points. Overnight, the benchmark 10-year yield fell to a record low of 0.38 percent before bouncing to 0.501 percent at the close. Likewise, the 30-year yield plunged below 1 percent for the first time ever, and was down 27.8 basis points to 0.938 percent.
The drop in Treasury yields accompanies expectations the Federal Reserve will cut rates by 100 basis points at its March 18 meeting, lowering its key interest rate to a range between 0 and 25 basis points.
The expectation of the oversized rate cut is putting pressure on financials, which typically make 50 percent to 75 percent of their net revenue from the spread between the interest paid to depositors and the interest charged to borrowers. Lower rates mean the banks will make less per loan.
J.P. Morgan Chase, Bank of America and Truist were all tumbling. Meanwhile, Wells Fargo was in focus after board chair Betsy Duke resigned.
FOX Business has learned Wall Street's top leaders will meet with President Trump at the White House on Wednesday to discuss the freefall in the markets, coronavirus and potential solutions.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 244.94 | +4.14 | +1.72% |
| BAC | BANK OF AMERICA CORP. | 46.45 | +0.39 | +0.85% |
| TFC | TRUIST FINANCIAL CORP. | 46.81 | +0.63 | +1.36% |
| WFC | WELLS FARGO & CO. | 74.83 | +1.26 | +1.71% |
In Europe, Italy’s MIB was down 11.5 percent after the country’s government on Sunday put 16 million people in the northern region of the country on lockdown in an effort to prevent the spread of COVID-19.
Elsewhere, in the region, France's was lower by 8 percent while Germany's DAX and Britain’s FTSE were both off 7.9 percent.
Overnight, Japan’s Nikkei paced the decline in Asia after the country’s government lowered its fourth-quarter gross domestic product to an annualized drop of 7.1 percent, down from 6.3 percent. Taking inflation into account, the drop was 1.8 percent on a seasonally adjusted quarterly basis.
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Meanwhile, China’s trade surplus swung to a $7.1 billion deficit – the first since March 2018 – in the first two months of the year. China’s Shanghai Composite fell 3 percent and Hong Kong’s Hang Seng shed 4.2 percent.