North American stock markets dropped again at the open on Wednesday despite extraordinary government efforts to stem the spread of the novel coronavirus and blunt the effect of business closures amid the health emergency.
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The Dow Jones Industrial Average fell 1,048.69 points, or 4.94 per cent, at the open to 20,188.69, while the S&P 500 opened lower by 92.69 points, or 3.66 per cent, at 2,436.50. The Nasdaq Composite dropped 432.47 points, or 5.90 per cent, to 6,902.32 at the opening bell.
In Toronto, the benchmark S&P/TSX composite index was down 516 points to 12,168 at 9:50 a.m. ET.
The Canadian dollar fell below the 70-cents US mark, dropping to 69.15 cents US.
Main indexes in Canada and the U.S. had bounced on Tuesday from a massive selloff a day earlier, as the Trump administration pressed for a $1 trillion stimulus package and the Federal Reserve relaunched a plan to purchase short-term corporate debt.
In Canada, Prime Minister Justin Trudeau is expected to announce an aid package worth an estimated $27 billion during a press conference at 10 a.m. ET on Wednesday.
Early on Wednesday, U.S. President Donald Trump confirmed that the Canada-U.S. border will be closed “by mutual consent” to non-essential traffic. Trump, who disclosed the news on Twitter, said trade will not be affected.
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However, investors fear that even dramatic stimulus will not be able to avert a deep recession, as the COVID-19 disease continues to spread rapidly across the globe and estimates for the duration of the damage extend out into the summer.
In the latest signs of corporate stress, FedEx Corp slumped 4.2 per cent after suspending its 2020 profit outlook and announcing cost cuts.
Even Cheerios maker General Mills Inc, which raised its profit forecast citing bulk-buying of its products, fell 3.7 per cent, while Apple Inc dropped 5.1 per cent as analysts anticipated a significant blow to its business from temporary store closures.
Boeing, just a year ago seen as a perpetual growth stock and a symbol of U.S. tech and industrial power, has now lost more than 60 per cent of its value this quarter while the market overall has fallen by around a third — or around $7 trillion in value.
The collapse into a bear market, among the fastest in history, has spurred some calls for a pause in trading. Treasury Secretary Steven Mnuchin reiterated the administration will keep markets open, while suggesting trading hours could be shortened at some point.
The idea of shortened hours drew immediate opposition from a number of leading investors and exchange managers, who said it would harm the market’s credibility.
— With files from the Canadian Press and Hannah Jackson and Erica Alini at Global News
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