Stocks plunge into bear market territory: March 12, 2020

By CNN Business

Updated 6:55 p.m. ET, March 12, 2020
31 Posts
Sort byDropdown arrow
1:11 p.m. ET, March 12, 2020

NY Fed vows to pump in over $1 trillion to fight coronavirus-linked 'disruptions' in markets

From CNN Business' Matt Egan

The New York Federal Reserve is taking extraordinary steps aimed at calming panicky financial markets.

The NY Fed just announced it will offer $500 billion in a three-month repo operation Thursday afternoon -- and then will do the same thing the next day. Moreover, the Fed said it will offer a $500 billion one-month repo operation Friday and take additional steps as well.

The dramatic moves sent US stocks surging off their worst levels of the day. At one point, the Dow was on track for its worst day since 1987. More recently, the Dow was only down 900 points, or 4%.

The NY Fed said these capital injections are being made to "address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak."

The Fed has repeatedly ramped up its cash injections this week in an effort to keep markets operating smoothly despite the coronavirus fears.

1:04 p.m. ET, March 12, 2020

European stocks suffer worst day in history as coronavirus panic grows

From CNN Business' Julia Horowitz

European stocks had their worst day in history Thursday as fears mounted over economic fallout from the novel coronavirus and measures taken by the European Central Bank to cushion the blow from the crisis failed to impress investors.

The ECB said it would ramp up bond purchases to help support the economy, joining policymakers around the world in a rush to contain the fallout from the coronavirus pandemic.

But the central bank, which also took steps to boost liquidity, did not push interest rates deeper into negative territory, a move that some investors had been expecting. That fed a freefall in European stocks, which were also hit by President Donald Trump's decision to ban travel from more than two dozen countries on the continent.

Europe's Stoxx 600 fell 11%, the index's worst day on record. Germany's DAX and France's CAC 40 both plunged over 12%.

Read more about European stocks' crazy day here.

12:43 p.m. ET, March 12, 2020

Stocks near session lows at midday

From CNN Business' Anneken Tappe

The selloff didn't take a break for lunch. At midday, US stocks are near their low-points of the trading day.

The Dow fell more than 9%, or 2,140 points. At its low-point, the index had shed more than 2,200 points.

The S&P 500 slid by 8.2%. The index tripped a circuit breaker this morning, falling 7%, which briefly halted trading. The next circuit breaker will be triggered if today's decline stretches to 13%.

The Nasdaq Composite is down 8.1%.

The policy response to combat the fallout from the coronavirus outbreak is still leaving investors wanting something more.

A bill for a coronavirus response package will be brought to a vote in the House of Representatives today, but the White House has been skeptical of it.

"The virus remains uncontained in Europe and the US, and although we have seen some stimulus measures from policymakers, it is unclear if it will prove comprehensive enough to mitigate the economic damage arising from coronavirus containment measures," said Mark Haefele, UBS Global Wealth Management's chief investment officer.

12:29 p.m. ET, March 12, 2020

Boeing has shaved 1,200 points off the Dow all by itself

From CNN Business' Chris Isidore

Boeing shares were down another 13% Thursday, meaning that the Dow component has lost half its value since the index hit a record high close on February 12.

The company has been struggling with getting approval for its best-selling jet, the 737 Max, to fly again. And now investors are worried about the impact the coronavirus will have on it its airline customers and on their ability to buy planes. That uncertainty prompted JPMorgan to cut its guidance on Boeing early Thursday to neutral. It had been one of few to have an overweight or buy recommendation.

The Dow is calculated based on the price of each of the 30 components, and Boeing stock, which was one of the more expensive components on the blue chip index not long ago, could move the index more than some of the less expensive shares.

As of midday trading Thursday, Boeing shares had lost $183 since the Dow's record close. And that means Boeing has cost the Dow 1,243 points all by itself, or about 15% of the Dow's overall decline.

12:14 p.m. ET, March 12, 2020

The US dollar is rallying

From CNN Business' Anneken Tappe

The US dollar is climbing higher as markets are flashing red around the globe. Why? Investors see a funding and liquidity squeeze on the horizon.

The ICE US Dollar Index, which measures the American currency against a basket of six others, was up 1.4% around midday. The euro -- the dollar's main rival -- was down 1.5% at $1.11.

In other words, the greenback is trapped in the cross currents of the market turmoil.

US assets got slammed in a massive sell-off of risk assets, the Federal Reserve cut interest rates and is expected to lower them further. Ordinarily this wouldn't be good for the dollar. But these are hardly ordinary times.

Tensions are beginning to build in the dollar funding markets. The US currency is used in contracts around the world.

The impact of a further tightening in US dollar funding markets may echo 2008 in that the dollar might grind higher, more or less regardless of the situation in the domestic economy," said Shaun Osborne and Juan Manuel Herrera, FX strategists at Scotiabank.

Despite the similarities to the 2008 liquidity crunch and companies dashing to bolster their US dollar holdings, things are by no means as bad now as they were then, they added.

11:27 a.m. ET, March 12, 2020

'A Quiet Place Part II' release delayed

From CNN Business' Jordan Valinsky

The release date for "A Quiet Place Part II" has been delayed amid growing concerns over the coronavirus' impact on the global theater marketplace.

Originally scheduled for March 20, director John Krasinski on Twitter said that it's "clearly not the right time" to release the horror film sequel.

Paramount Pictures, the film's distributor, hasn't set a new global release date. It said in a statement the decision was made because of the "ongoing and developing situation concerning coronavirus and restrictions on global travel and public gatherings."

This is the second major film's release date to be pushed back. Last week, MGM and Universal announced that the upcoming James Bond film "No Time To Die" will be released in November instead of April.

11:46 a.m. ET, March 12, 2020

This is the burst of the 'everything bubble'

From CNN Business' Anneken Tappe

The coronavirus selloff is asset class-agnostic: everything is getting hammered.

Stocks are in the red, so are commodities, led by plummeting oil prices.

The ‘Everything Bubble’ is bursting," said Neil MacKinnon, Global Macro Strategist at VTB Capital. "The historically extreme valuations in US equity markets which investors have ignored for so long are coming home to roost."

Risk aversion has manifested itself in Treasury yields, that are lower than ever before. A "Japanification" of the US government bond market is under way, MacKinnon said.

Japan has had ultra-low interest rates and bond yields for years, but the desired growth bump never came. Market participants refer to this set of circumstances as "japanification". It has also been observed in Europe.

Central banks around the world have loosened monetary policy in the face of the coronavirus crisis, but "the risk is that these policies fail to work in generating sustainable economic growth, as has been the case in Japan," MacKinnon said.

11:28 a.m. ET, March 12, 2020

So much for bitcoin being a place to hide

From CNN Business' Paul R. La Monica

Bitcoin is supposed to be a safe haven -- a digital version of gold if you will. It's not backed by a government and shouldn't be hurt like the dollar, euro and other paper currencies are when central banks cut rates. 

So much for that argument. Bitcoin plunged more than 20% Thursday and has now fallen more than 30% in the past week. It's trading barely above $6,000 after soaring to more than $10,000 just a few weeks ago.

The cryptocurrency has been shellacked along with just about every other major financial asset as a result of the coronavirus pandemic.

Except for actual gold, that is. The price of the yellow metal did fall along with the rest of the market Thursday but it is still up about 4% in 2020 and is not far from a seven-year high.

So when it comes to safe havens, it looks like investors want something they can actually touch and feel instead of an asset they have to mine in a server farm.

11:31 a.m. ET, March 12, 2020

As the Dow plunges 2,000 points, Trump promises markets will be 'just fine'

From CNN Business' Matt Egan and Nikki Carvajal

It's no secret President Donald Trump tracks the stock market almost constantly. In many ways, he views the Dow as a real-time report card on his presidency.

Yet Trump is expressing confidence, at least outwardly, about the market despite staggering losses suffered in recent weeks.

"The markets are going to be just fine," Trump told reporters Thursday at the White House.

His comments came after Wall Street experienced such severe selling that the New York Stock Exchange halted trading for 15 minutes Thursday, the second market timeout in four days.

The S&P 500 plummeted into bear market territory after Trump announced a travel ban with Europe. If the index closes there, it would mark the end of the 11-year bull market.

The market plunge has been driven by fears that the coronavirus pandemic will set off a recession. Trump is urging lawmakers to quickly enact a stimulus package of tax cuts and other assistance aimed at limiting the economic damage.