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Stocks Suffer Worst Drop Since 2011: Live Updates Stocks Suffer Worst Drop Since 2011: Live Updates
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Stocks suffered their sharpest daily decline in more than nine years on Monday, with markets around the world plunging as oil prices cratered after a clash between the worlds biggest oil producers.Stocks suffered their sharpest daily decline in more than nine years on Monday, with markets around the world plunging as oil prices cratered after a clash between the worlds biggest oil producers.
The S&P 500, already down 12 percent from its late February high, fell another 5 percent. The sudden downdraft meant that trading in the United States was automatically halted early in the day, after the S&P 500 initially fell 7 percent. The S&P 500, already down 12 percent from its late February high, fell another 7 percent on Monday. The sudden downdraft meant that trading in the United States was automatically halted early in the day — a rare occurrence meant to prevent stocks from crashing — but it resumed after a 15 minute delay.
The drop on Monday was the worst for stocks in the United States since August 2011, when a congressional fight over the debt ceiling pushed the United States to the brink of defaulting on its debt. The selling in recent weeks has left stock prices roughly where they were last June.The drop on Monday was the worst for stocks in the United States since August 2011, when a congressional fight over the debt ceiling pushed the United States to the brink of defaulting on its debt. The selling in recent weeks has left stock prices roughly where they were last June.
After Saudi Arabia and Russia set off a price war for crude over the weekend, oil lost nearly a quarter of its value in early trading on Monday, the kind of plunge that has not happened in nearly 30 years. That led to a collapse in share prices of companies and businesses that service the oil and gas sector. Manufacturers and banks, which are sensitive to concerns about the economy, also tumbled.After Saudi Arabia and Russia set off a price war for crude over the weekend, oil lost nearly a quarter of its value in early trading on Monday, the kind of plunge that has not happened in nearly 30 years. That led to a collapse in share prices of companies and businesses that service the oil and gas sector. Manufacturers and banks, which are sensitive to concerns about the economy, also tumbled.
Financial markets have whipped around for weeks as investors struggled to quantify the economic impact of the spreading coronavirus: stocks have tumbled, oil prices cratered, and yields on government bonds reflected a sense among investors that there was worse still to come.Financial markets have whipped around for weeks as investors struggled to quantify the economic impact of the spreading coronavirus: stocks have tumbled, oil prices cratered, and yields on government bonds reflected a sense among investors that there was worse still to come.
“Markets want to hear that the global economy is open for business, and the problem is, it isn’t easy to say that going forward,” said Patrick Chovanec, chief strategist at the investment advisory firm Silvercrest Asset Management.“Markets want to hear that the global economy is open for business, and the problem is, it isn’t easy to say that going forward,” said Patrick Chovanec, chief strategist at the investment advisory firm Silvercrest Asset Management.
In Europe, major stock benchmarks were down more than 6 percent. Shares ended sharply lower in Asia also.In Europe, major stock benchmarks were down more than 6 percent. Shares ended sharply lower in Asia also.
As stocks fell, investors seeking a safe harbor pushed yields on government bonds to new lows. The yield on the closely watched 10-year U.S. Treasury bond, which falls as the price of the bonds rise, dropped below 0.5 percent, about half the level of just a week ago.As stocks fell, investors seeking a safe harbor pushed yields on government bonds to new lows. The yield on the closely watched 10-year U.S. Treasury bond, which falls as the price of the bonds rise, dropped below 0.5 percent, about half the level of just a week ago.
Five minutes into the trading day in the United States on Monday, the plunge in the S&P 500 hit 7 percent, setting off an automatic 15-minute trading halt known as a circuit breaker.Five minutes into the trading day in the United States on Monday, the plunge in the S&P 500 hit 7 percent, setting off an automatic 15-minute trading halt known as a circuit breaker.
The next trading halt would come if the S&P 500 falls 13 percent from Friday’s close. Should stocks fall 20 percent, trading would end for the rest of the day.The next trading halt would come if the S&P 500 falls 13 percent from Friday’s close. Should stocks fall 20 percent, trading would end for the rest of the day.
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Circuit breakers were introduced after the October 1987 Black Monday stock market crash as a way to provide time for reflection by temporarily halting the action on hectic days. The circuit breakers were revamped after the May 6, 2010, collapse in stocks that came to be known as the Flash Crash. Monday was the first time the current circuit breakers, which were established in 2013, were set off.Circuit breakers were introduced after the October 1987 Black Monday stock market crash as a way to provide time for reflection by temporarily halting the action on hectic days. The circuit breakers were revamped after the May 6, 2010, collapse in stocks that came to be known as the Flash Crash. Monday was the first time the current circuit breakers, which were established in 2013, were set off.
It seemed to have helped on Monday: The S&P 500 recovered some ground soon after trading resumed, and was down about 6 percent by 10 a.m.
Shares in oil companies fell sharply Monday, reflecting the loss of billions of dollars in value, as the price of crude nose-dived.Shares in oil companies fell sharply Monday, reflecting the loss of billions of dollars in value, as the price of crude nose-dived.
Many small oil companies that are responsible for more than 15 percent of American oil production face bankruptcy if the price war between Saudi Arabia and Russia goes on for more than a few weeks, while larger oil companies will be challenged to protect their dividend payments.
In the United States, the 10 worst-performing stocks in the S&P 500 were oil producers. All of them were down more than 30 percent, with shares of companies like Marathon Oil and Apache Corporation down about 40 percent.In the United States, the 10 worst-performing stocks in the S&P 500 were oil producers. All of them were down more than 30 percent, with shares of companies like Marathon Oil and Apache Corporation down about 40 percent.
Larger oil producers like Exxon Mobil and Chevron fell about 10 percent.Larger oil producers like Exxon Mobil and Chevron fell about 10 percent.
Elsewhere, Saudi Aramco, the national oil company of Saudi Arabia, fell as much as 10 percent, the maximum amount allowed on the Riyadh stock exchange.Elsewhere, Saudi Aramco, the national oil company of Saudi Arabia, fell as much as 10 percent, the maximum amount allowed on the Riyadh stock exchange.
Royal Dutch Shell fell as much as 22 percent after trading started in Europe, but then shed about half of those losses, to about 13 percent lower in midmorning trading.Royal Dutch Shell fell as much as 22 percent after trading started in Europe, but then shed about half of those losses, to about 13 percent lower in midmorning trading.
Shares in BP, based in Britain, and France-based Total were lower by about the same amount.Shares in BP, based in Britain, and France-based Total were lower by about the same amount.
Many small oil companies that are responsible for more than 15 percent of American oil production face bankruptcy if the price war between Saudi Arabia and Russia goes on for more than a few weeks, while larger oil companies will be challenged to protect their dividend payments. Thousands of oil workers are about to receive pink slips. Banks are being hit on all fronts Monday. Shares of the biggest lenders are down by more than 10 percent, with JPMorgan falling 15 percent and Bank of America dropping 12 percent.
Producing countries, especially Venezuela, Iran and several African countries, will suffer more intense economic hardship — with political fallout that is hard to predict. The only winners may be drivers who are bound to pay much lower gasoline prices in the coming weeks, particularly those with older, less fuel efficient cars who tend to be low-income consumers. The selling is explained by many factors:
Tumbling interest rates squeeze banks’ profitability by lowering how much they can charge on loans.
With oil prices falling, smaller American oil companies could have a hard time repaying debt owed to big lenders.
The across-the-board hit to financial markets over the past few weeks means that bank trading desks could wind up reporting large losses. Plus, uncertainty about the economy could hurt the banking business in general as companies delay borrowing and spending decisions.
President Trump continued to play down the economic impact from the outbreak, comparing the number of deaths from coronavirus with those from the flu and blaming the fallout on oil prices and the news media.President Trump continued to play down the economic impact from the outbreak, comparing the number of deaths from coronavirus with those from the flu and blaming the fallout on oil prices and the news media.
The comments came as Mr. Trump’s economic advisers were expected to brief him on a menu of potential fiscal stimulus items at the White House on Monday, according to people familiar with the matter. The options are expected to include targeted tax relief and paid sick leave for workers.The comments came as Mr. Trump’s economic advisers were expected to brief him on a menu of potential fiscal stimulus items at the White House on Monday, according to people familiar with the matter. The options are expected to include targeted tax relief and paid sick leave for workers.
A senior Democratic aide said on Monday morning that discussions were starting among House committee chairmen, congressional Democrats and administration officials on what such a package might look like.A senior Democratic aide said on Monday morning that discussions were starting among House committee chairmen, congressional Democrats and administration officials on what such a package might look like.
A day earlier, Democratic leaders in Congress threw their support behind government-paid sick leave and increased spending on safety net programs. On Monday, Senator Chuck Grassley of Iowa, the powerful Republican chairman of the Senate Finance Committee, said he was open to targeted tax relief and other measures to aid specific industries and the overall economy. A day earlier, Democratic leaders in Congress threw their support behind government-paid sick leave and increased spending on safety net programs.
Some of the world’s most important financial markets crossed into, or flirted with, bear market territory on Monday. That could augur an ugly week for those holding the world’s wealth.Some of the world’s most important financial markets crossed into, or flirted with, bear market territory on Monday. That could augur an ugly week for those holding the world’s wealth.
Japanese and Australian stocks finished bruising trading days down 20 percent from their recent highs — the technical definition of a bear market, the flip side of the go-go bull market that has inspired memorials to surging capitalism. The drops represent billions of dollars in losses for some of the most valuable companies in both countries.Japanese and Australian stocks finished bruising trading days down 20 percent from their recent highs — the technical definition of a bear market, the flip side of the go-go bull market that has inspired memorials to surging capitalism. The drops represent billions of dollars in losses for some of the most valuable companies in both countries.
Stocks in Germany, France and Britain plunged on Monday morning, putting all three well into bear market territory.Stocks in Germany, France and Britain plunged on Monday morning, putting all three well into bear market territory.
Bear markets are rare and are sometimes seen as a harbinger of tougher economic times to come. Some notable bear markets in the United States include the one that ushered in the global financial crisis in 2007 and the dot-com bust in 2000.Bear markets are rare and are sometimes seen as a harbinger of tougher economic times to come. Some notable bear markets in the United States include the one that ushered in the global financial crisis in 2007 and the dot-com bust in 2000.
With the S&P 500 down about 12 percent through Friday, stocks in the United States were not yet in bear market territory on MondayWith the S&P 500 down about 12 percent through Friday, stocks in the United States were not yet in bear market territory on Monday
Apple’s iPhone sales in China dropped by about 60 percent to roughly 500,000 last month from a year ago, according to Chinese government data. Overall smartphone sales fell by roughly 56 percent in the country over the period. Apple said last month that its revenue in the current quarter would be lower than forecast because of production delays and declining sales in China related to COVID-19. Since then, Apple has reopened stores in China, and Foxconn, which assembles most iPhones, said it expects to be back to full production rates by the end of March.Apple’s iPhone sales in China dropped by about 60 percent to roughly 500,000 last month from a year ago, according to Chinese government data. Overall smartphone sales fell by roughly 56 percent in the country over the period. Apple said last month that its revenue in the current quarter would be lower than forecast because of production delays and declining sales in China related to COVID-19. Since then, Apple has reopened stores in China, and Foxconn, which assembles most iPhones, said it expects to be back to full production rates by the end of March.
To combat coronavirus-related disinformation on the internet, the British government on Monday said it has pulled together a specialized unit that will work with tech companies to identify and prevent its spread.To combat coronavirus-related disinformation on the internet, the British government on Monday said it has pulled together a specialized unit that will work with tech companies to identify and prevent its spread.
To keep cash flowing smoothly through the financial system, the Federal Reserve Bank of New York on Monday said it would ramp up the amount of funding it offered banks by increasing its daily offering of overnight repurchase agreements — essentially short-term loans to eligible banks.To keep cash flowing smoothly through the financial system, the Federal Reserve Bank of New York on Monday said it would ramp up the amount of funding it offered banks by increasing its daily offering of overnight repurchase agreements — essentially short-term loans to eligible banks.
Staff members at Vice Media Group were told to work from home on Monday after the company said that an employee in its Brooklyn office “may have been exposed” to the coronavirus. The company acted “out of an abundance of caution,” according to Vice spokeswoman Meera Pattni.Staff members at Vice Media Group were told to work from home on Monday after the company said that an employee in its Brooklyn office “may have been exposed” to the coronavirus. The company acted “out of an abundance of caution,” according to Vice spokeswoman Meera Pattni.
For the third time in two weeks, the turmoil in the markets took Robinhood, the retail trading application, offline on Monday morning, infuriating customers who were unable to do anything while stocks plunged. Last week, the company said a surge in customer activity overwhelmed its backend systems, leaving angry investors, some of whom said they lost much of their savings. For the third time in two weeks, the turmoil in the markets took Robinhood, the retail trading application, offline on Monday morning, infuriating customers who were unable to do anything while stocks plunged. Last week, the company said a surge in customer activity overwhelmed its back-end systems, leaving angry investors, some of whom said they lost much of their savings.
The Federal Trade Commission and Food and Drug Administration warned seven companies that have been allegedly selling unapproved products — including teas and essential oils — saying the claims may violate federal law. The companies are Vital Silver, Quinessence Aromatherapy, N-ergetics, GuruNanda, Vivify Holistic Clinic, Herbal Amy and the Jim Bakker Show. JetBlue said Monday that it was withdrawing its earnings estimates for the first quarter and 2020 because of “ongoing uncertainty” caused by the coronavirus, which has contributed to a rapid decline in airline bookings. JetBlue has said it is offering voluntary leave to workers.
JetBlue said Monday that it was withdrawing its earnings estimates for the first quarter and 2020 because of “ongoing uncertainty” caused by the coronavirus, which has contributed to a rapid decline in airline bookings. JetBlue has said it is adjusting schedules through early May and considering reducing flights and offering voluntary leave to workers.
The crash in energy markets will not hurt Russia as much as other nations and could serve a longstanding Russian energy policy goal of driving out American competitors. Industry analysts say the Kremlin may have calculated that prices were going to drop no matter what they did, so there was no point in further limiting production.
Reporting and research were contributed by Deborah Solomon, Jim Tankersley, Matt Phillips, Adam Satariano, Jeanna Smialek, Alexandra Stevenson, Jack Ewing, Liz Alderman, Li Yuan, Ben Dooley, Kevin Granville and Carlos Tejada.Reporting and research were contributed by Deborah Solomon, Jim Tankersley, Matt Phillips, Adam Satariano, Jeanna Smialek, Alexandra Stevenson, Jack Ewing, Liz Alderman, Li Yuan, Ben Dooley, Kevin Granville and Carlos Tejada.