Wall Street Turns Deep Red After the Cooling Period

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The stock exchanges in New York turned dark red on Monday. Due to the significant losses in the opening minutes, trading was even temporarily halted.

 

Concerns about the new coronavirus continue to dominate global markets. A new, unexpected rate cut by the Federal Reserve (Fed) has yet to turn the tide on Wall Street.

It is the third time in a short time that Wall Street has collapsed so hard that the emergency mechanism is activated. That mechanism was instituted after the major stock market crash of 1987. If the S&P falls 13 percent, another fifteen-minute break follows. With a drop of 20 percent, trading is suspended for the day.

The broad S&P 500 was 10.3 percent lower at 2436 points. The lead Dow-Jones index lost 10 percent to 20,886 after reopening, and tech indicator Nasdaq was 9.6 percent in the red to 7125 points.

The Fed cut the key interest rate on Sunday by one percentage point to between 0 and 0.25 percent. It is already the second time this month that the Fed has cut interest rates in the meantime. The US central bank umbrella is also restarting its bond-buying program, totalling $ 700 billion. The new interest rate move seems to be unable to allay investors’ concerns about the damaging effects of the virus on the economy.

Bank stocks such as those of JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America lost up to 15 percent. Oil funds like Chevron and ExxonMobil shared losses of up to 11 percent in the slump under pressure from the sharp drop in oil prices.

Brent oil (minus 12 percent) briefly cost less than $ 30 a barrel for the first time since 2016. US oil traded at $ 28.72 a barrel, down 11 percent.

Apple lost 9 percent until trading ceased. The technology group has to pay a fine of 1.1 billion euros in France. Apple has been guilty of abuse of its dominant position, the French market watchdog said.

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