Dow ends 10% lower in worst session since 1987

New York — The Dow suffered its worst session since 1987 on Thursday, plunging 10% as emergency measures by central banks failed to douse mounting recession fears due to the coronavirus.

The Dow Jones Industrial Average finished down about 2,350 points, or 10%, at 21,200.62.

The broad-based S&P 500 plunged 9.5% to 2,480.64, while the tech-rich Nasdaq Composite index tumbled 9.4% to 7,201.80.

Thursday’s session means the S&P 500, like the Dow, is now in a “bear market,” a drop of more than 20% from a market peak, ending the longest “bull market” in history.

“Bottoming is a process, it’s not a one-day process normally,” said Quincy Krosby, chief market strategist for Prudential Financial.

“Now the idea of a recession is part of the narrative. Are we going into one? And if we are, how deep will it be? Will we have a recovery in the second half?”

Stocks were deep in the red the entire session, which was paused for 15 minutes early in the day after the S&P 500’s losses hit 7%, triggering an automatic suspension.

Equities briefly cut their losses after the New York Federal Reserve announced measures to inject an additional $1.5-trillion in cash into financial markets this week.

But the bounce proved short-lived. Emergency measures announced by the European Central Bank also did little to reassure investors in Paris and Frankfurt, where bourses lost more than 12%.

While President Donald Trump and congressional Democrats sparred over details in a stimulus package, investors absorbed a running stream of announcements of major event cancellations and other economic dislocations.

Major League Baseball postponed its season by at least two weeks, while New York banned events with more than 500 people as the Broadway League announced theatres would be shut for a month.

President Donald Trump’s shock announcement to bar travel from Europe for 30 days battered airline and travel stocks, with Delta Air Lines and United Airlines each losing more than 20%.

The bleak outlook for airlines also again weighed on Boeing, which plunged 18.1%, making it again the biggest loser in the Dow.

Restaurant stocks were another big loser, with Darden Restaurants and Brinker International down about 15% or more.

Shares of Carnival cruise lines plunged 31.2% as it announced it would pause its Princess line for two months.

AFP