NEW YORK — The selloff in U.S. stocks deepened on Wednesday and the Dow was set to erase the last of its gains since U.S. President Donald Trump‘s 2017 inauguration, as the coronavirus pandemic threatened to bring U.S. economic activity to a halt.
The benchmark S&P 500 index was last down 7.3 per cent after triggering a 15-minute trading cutout at a 7 per cent decline, extending the recent plunge that ended Wall Street’s longest-ever bull run. The S&P 500 is now down more than 30 per cent since its Feb. 19 record closing high.
With airports and hotels emptying and airlines asking staff to take unpaid leave to stem losses, the S&P 1500 airlines index sank more than 20 per cent. Shares in Hilton, Marriott and Hyatt hotels fell roughly by 20 per cent to 30 per cent.
“This market went from a position of where we were fearless back at the beginning of February to some days like today where you feel hopeless about what’s going on in the market,” said Wayne Wicker, chief investment officer of Vantagepoint Investment Advisers.
Trump’s request for Congress to approve $500 billion in cash payments to taxpayers along with $50 billion in loans for airlines did little to stem the rout.
Shares in Boeing Co, for long a symbol of U.S. tech and industrial power, tumbled and were now down more than 60 per cent since the start of the year.
The Dow Jones Industrial Average fell 1,682.15 points, or 7.92 per cent, to 19,555.23, the S&P 500 lost 185.33 points, or 7.33 per cent, to 2,343.86 and the Nasdaq Composite dropped 476.87 points, or 6.5 per cent, to 6,857.91.
Wall Street’s main indexes 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 buy short-term corporate debt.
But dramatic stimulus measures have only provided short-lived bounces in equities with investors factoring in a global recession and worrying about the duration of the damage extending into the summer.
“There are two things the market is awaiting — a stimulus and it needs to be bigger than a trillion dollars for sure to help all the workers who are going to be out of work for a month or two,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
“And a little hope in color on some drug approvals for treatment.”
Worries about mass debt defaults or writedowns pressured U.S. lenders, sending the S&P 500 banking subsector down sharply.
The S&P 500 has fallen by around a third, or around $7 trillion in value, since scaling record highs in mid-February. Its collapse into a bear market, among the fastest in history, has spurred some calls for a pause in trading.
Treasury Secretary Steven Mnuchin late on Tuesday suggested shortening of trading hours at some point, but that drew opposition from several leading investors and exchange managers, who said it would harm the market’s credibility.
Declining issues outnumbered advancing ones on the NYSE by a 16.50-to-1 ratio; on Nasdaq, a 10.13-to-1 ratio favored decliners.
The S&P 500 posted 5 new 52-week highs and 292 new lows; the Nasdaq Composite recorded 9 new highs and 1,095 new lows.
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