Dow slips 500 points a day after hitting 3-year lows on coronavirus uncertainties
- US stocks continued their downtrend on Thursday as coronavirus risks outweighed massive stimulus efforts from governments and central banks.
- All three major US indices slipped as forecasts for a US recession intensified and investors sought new details on the White House's fiscal stimulus plans.
- The decline follows a 1,300 point slump in Wednesday's session. The index's recent intraday low marked an erasure of all gains made since President Trump's inauguration.
- Watch all indices update live here.
US stocks slid on Wednesday as worsening coronavirus risks overshadowed stimulus measures from the White House and the Federal Reserve.
The Dow Jones industrial average sunk further below the 20,000 threshold it breached in Wednesday's session. Investors continued to pivot from risk assets to cash and other stable holdings even as the White House offered new details on its fiscal policy plan.
Here's where major US indexes stood as of 9:35 a.m. ET on Thursday:
- S&P 500: 2,347.41, down 2.1%
- Dow Jones industrial average: 19,368.54, down 2.7% (530 points)
- Nasdaq composite: 6,918.83, down 1%
The slump follows new aid measures from the White House meant to keep businesses and families afloat as the US faces a heightened risk of recession.
The Trump administration plans to enact a $1 trillion stimulus package that includes emergency business loans and checks for Americans. President Trump also signed new legislation Wednesday evening that includes tax credits for paid sick leave and boosts programs like unemployment benefits and food stamps.
Recent capital injections from the Federal Reserve have also done little to drive market optimism. The central bank has pumped trillions of dollars into markets to ease liquidity concerns and boost lending activity.
The market stumble arrives as more banks issue fresh recession warnings. Deutsche Bank projected Wednesday that the world economy will contract the most since World War II in the second quarter as the coronavirus drives economic shutdown. Bank of America chimed in on Thursday, saying the US economy has already entered an economic recession that will intensify through the second quarter.
The morning decline follows the Dow's 1,300 point slip on Wednesday. The index fell as much as 2,300 points, or 11%, during the session, at one point erasing all gains made since President Trump's inauguration. The Dow surged in the last hour of the session to pare some losses.
Brent crude continued to drop in early Thursday trading. The commodity's price faces intense pressure from a market-share war between Saudi Arabia and Russia, with both nations flooding the market with inventory and pushing prices to their lowest levels since 2003.
Prices could even go negative if the US's storage capacity tops out and forces the country to offload mass sums of crude oil, Mizuho Securities analysts projected in a Tuesday note.
"This is not the equity market value of AAPL, or the gauge of consumer confidence. These cannot go negative," the firm wrote. "Negative prices are simply a higher cost of storage than market."
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