AFP – Wall Street stocks plunged more than 10 percent early Monday as panic over the economic hit from the coronavirus outbreak offset emergency moves by the Federal Reserve.
About 25 minutes into trading, the Dow Jones Industrial Average stood at 20,669.42, down 10.9 percent, or around 2,500 points, resuming trading after a 15-minute suspension triggered by steep losses.
The broad-based S&P 500 sank 10.6 percent to 2,422.69, while the tech-rich Nasdaq Composite Index dove 10.5 percent to 7,051.77.
The grim beginning to the US session came as bourses in Asia and Europe fell hard as the outbreak effectively shuttered Spain and much of France and halted more economic activity in the United States, especially in New York City and other regions with emerging coronavirus clusters.
Manufacturing activity in New York state fell to its lowest level since 2009, according to the New York Federal Reserve Bank’s monthly industry survey, among the first datapoints to show a massive hit from the COVID-19 outbreak.
The Fed announced late Sunday a series of emergency measures, including lowering interest rates to a range of 0-0.25 percent, where it was during the 2008 global financial crisis, and removing reserve requirements to allow banks to use cash backstops to meet unexpected funding needs.
“The Fed’s actions, while well intended, have had an opposite effect on investor sentiment,” said Briefing.com analyst Patrick O’Hare.
“They have generated fear, not confidence, as the spread and scope of their actions resonates now as more of a ‘catch-up’ action than a pro-active action.”