Worst Day for Equities Since 1987 Crash

Stocks plummeted once again on Thursday after President Donald Trump and the Federal Reserve both failed to quell concerns over the economic slowdown stemming from the coronavirus, leading to a historic drop for the U.S. markets.

The Dow Jones Industrials crumbled 2,352.60 points, or 10%, to 21,200.62. The index had its worst drop since the 1987 Black Monday market crash when it collapsed by more than 22%.

The broader S&P 500 backed down 260.74 points, or 9.5%, to 2,480.64, joining the Dow in a bear market. The S&P 500 also hat its worst day since 1987.

The NASDAQ dumped 750.25 points, or 9.4%, to 7,201.80.

The major averages got a brief respite after the Federal Reserve announced it will ramp up its overnight funding operations to more than $500 billion on Thursday. It will then offer more repo operations totaling $1 trillion on Friday. The Fed also expanded the types of securities it would purchase with reserves.

However, stocks quickly traded back towards their session lows as investors awaited more aggressive measures to support the economy amid the virus outbreak.

On Wednesday, the Dow ended its historic 11-year bull market run by closing in bear-market territory. A bear market marks a 20% decline from all-time highs. The S&P 500 was just shy of that threshold going into Thursday’s trading and was poised to enter bear market territory based on futures losses.

Before the open, futures contracts tied to the major indexes fell to their so-called limit down thresholds, sliding 5%. These limit down levels act as a floor for selling until regular trading begins.

Cruise line shares dropped sharply. Royal Caribbean traded 27.5% lower while Carnival dropped 18.5% and Norwegian Cruise Line slid 25.5%. Airline shares such as United, Delta, and American all fell more than 9%.

In his address, Trump announced travel from Europe will be suspended for 30 days as part of the government’s response to the coronavirus outbreak. Trump also said the administration would provide financial relief for workers who are ill, caring for others due to the virus or are quarantined.

These moves were not specific enough for investors, however, who were looking for a more robust fiscal response to curb potentially slower economic growth stemming from the coronavirus.

Also causing concern about how pervasive the virus could already be in this country was the announcement Wednesday that the National Basketball Association is suspending its season after a Utah Jazz player tested positive for coronavirus. Movie actor Tom Hanks and his wife, Rita Wilson, also said they tested positive for the coronavirus.

Prices for the 10-Year U.S. Treasury let go of gains, raising yields to 0.89% from Wednesday’s 0.85%. Treasury prices and yields move in opposite directions.

Oil prices fell $1.95 to $31.03 U.S. a barrel.

Gold prices skidded $73.60 to $1,568.70 U.S. an ounce.

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