Dow drops 1,400 points, ending in bear market

[bostonangler]

The S&P 500, Dow and Nasdaq tumbled Wednesday as the volatility of the past couple weeks extended further.

The Dow shed 1,464.94 points during the session, or 5.9%, sending it more than 20% below its recent high from February and into a bear market.

Midday Wednesday, the World Health Organization officially designated the coronavirus outbreak a pandemic, as the virus spread across more than 100 countries and infected well over 100,000 individuals. The Dow sank more than 1,200 points following the announcement.

Stocks’ afternoon leg lower extended declines from earlier in the regular and overnight sessions. During the pre-market session, stock futures slumped after the White House failed to offer further details on a stimulus package President Donald Trump earlier this week had characterized as “very major.” The measures reportedly in consideration included a payroll tax cut and expanded worker protections, to help counteract any economic fall-out from the ongoing coronavirus outbreak.

While further fiscal stimulus in the U.S. remains a point of uncertainty, overseas, central bankers have unleashed further monetary stimulus aimed at counteracting the economic hit from COVID-19.

The Bank of England on Wednesday announced a surprise half-point interest rate cut at the conclusion of a special meeting, following a similar move from the U.S. Federal Reserve last week.

“Following the spread of COVID-19, risky asset and commodity prices have fallen sharply, and government bond yields reached all-time lows, consistent with a marked deterioration in risk appetite and in the outlooks for global and UK growth,” the BOE said in a statement Wednesday, “Indicators of financial market uncertainty have reached extreme levels.”

The BOE’s move brought the main bank rate down to 0.25%, and was decided unanimously by the bank’s officials.

“Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies,” the BOE said. “This economic shock will affect both demand and supply in the economy.”

 

https://finance.yahoo.com/news/stock-market-news-live-updates-march-11-2020-115430808.html

 

B/A