Business & Economy

Dow suffers worst day since 1987 amid coronavirus, recession fears

New York, Mar 16 (efe-epa).- The Dow Jones Industrial Average suffered its biggest percentage loss since the 1987 crash on Monday amid fears about the extent of the coronavirus’ impact on the United States’ economy.

That leading Wall Street blue-chip indicator closed down 2,997.10 points, or 12.93 percent, to 20,188.52. The Dow is now more than 30 percent off its intra-day, 52-week high of 29,568.57, which was set on Feb. 12.

The S&P 500, a broader-based, large-cap index, ended down 11.98 percent, or 324.89 points, at 2,386.13 on Monday, while the tech-heavy Nasdaq plunged 970.28 points, or 12.32 percent, to 6,904.59.

US markets have been on a roller coaster in recent days, with Monday marking the third day in a week that trading had to be halted due to a steep drop in the S&P 500 of at least 7 percent.

The Dow closed down nearly 10 percent last Thursday, which until Monday had been its biggest percentage decline since Oct. 19, 1987 (the Black Monday crash, when that index sank 22.6 percent).

Last Friday, the Dow posted its biggest point gain ever – 1,985.00 points, an increase of 9.4 percent.

Markets worldwide have been rattled by the latest developments related to the Covid-19 pandemic, with the pan-European Stoxx 600 index down 4.86 percent on Monday.

In the US (4,252 cases and 75 deaths), the closure of businesses and schools and a recommendation by the US Centers for Disease Control and Prevention that events with 50 people or more people be canceled have raised concerns about the impact on consumer spending, which accounts for more than two-thirds of the country’s gross domestic product.

Investors also reacted negatively to comments Monday by President Donald Trump, who told journalists during a press conference at the White House that the coronavirus crisis could continue to disrupt American life until July or August and acknowledged that US economy might slip into a recession.

The president said he is optimistic there will be a “tremendous surge” in the economy once the coronavirus crisis ends, but that prediction did not cheer investors on Monday.

Stocks that have been Wall Street darlings in recent years like Netflix and Apple were not spared the carnage on Monday, falling 11.14 percent and 12.86 percent, respectively.

Those declines occurred despite the US Federal Reserve’s emergency move on Sunday to lower its benchmark interest rate by one percentage point to a target range of between 0 percent and 0.25 percent and take other bold measures to shore up the economy.

“The markets are getting no break with yesterday’s historic Fed actions and Covid-19 dominating the world’s headlines,” said the executive director of financial securities service Instinet, Frank Cappelleri. “While the news continues to worsen and with the price action doing things we’ve only seen a handful of other times in the last century, it’s nearly impossible to keep things in perspective.”

The Dow’s worst losers on Monday were Boeing (down 23.85 percent) and the Travelers insurance company (off 20.8 percent). EFE-EPA


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