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Dow and US stocks plunge again: March 16, 2020
By one metric at least, the coronavirus-inspired mayhem on Wall Street now exceeds what was experienced during the 2008 financial crisis.
The VIX (VIX), a gauge of stock market volatility, spiked 43% to 86.69 on Monday as coronavirus fears ripped through Wall Street. That takes out the previous record set on October 24, 2008, according to Refinitiv.
On an intraday basis, the VIX topped out at 83.56 on Monday, just shy of the 2008 record of 89.53.
Worries about the coronavirus outbreak sent the Dow plunging 2,997 points, or 12.9%. The S&P 500 plummeted 12%, its worst day since 1987.
Selling was so extreme that trading on the New York Stock Exchange was halted for 15 minutes. It was the third time such a circuit breaker was triggered in the past week.
The CNN Business Fear & Greed Index of market sentiment, which incorporates the VIX and other measures, is flashing "extreme fear."
That fear has driven up market volatility in dramatic fashion. The VIX has doubled so far in March. In fact, it's now up a whopping 500% this year.
It was another ugly day for US stocks. The Dow recorded its worst one-day point drop in history and its worst performance on a percentage basis since October 19, 1987, also known as “Black Monday.”
Stocks fell to session lows in the final hour of trading, as President Donald Trump said the outbreak could last until July or August. The Dow dropped more than 3,000 points at its worst.
The Dow was down 2,700 points after President Donald Trump said American life might not return to normal until August. It had fallen as many as 2,800 points Monday.
Trump also said the virus "is not under control" and acknowledged the economy may be falling into a recession.
Investors were displeased. The S&P 500 was down 10.8%.
US stocks are set to close in the red yet again, with all major stock indexes firmly negative.
The market's broadest measure, the S&P 500, is down 8.4%. And while that might sound terrible, it's only its worst day since Thursday. That's the kind of new normal -- outsized market swings -- investors have had to get used to.
Market turmoil has been persistent, and this week looks no better. Now the voices calling for a temporary shut-down of the US stock market are getting louder.
But closing shop is no way to restore confidence, said John Higgins, chief market economist at Capital Economics.
Exchanges stayed open during the 2008 financial crisis, the bursting of the dot-com bubble in 2000 and the Great Depression, Higgins said. The market has been closed for a prolonged period only for practical reasons, such as the four days after 9/11. It has never shut down because of volatility.
In addition, "stock markets have now fallen a long way and so seem to be discounting a very bad economic outcome already," Higgins said. That is why markets might start stabilizing soon, he added.
New York Stock Exchange President Stacey Cunningham tweeted earlier that it was important for markets to remain open and function in an orderly manner.
Airlines slammed by the coronavirus are requesting an aid package from the US government that could amount to up to $58 billion, according to industry group Airlines for America.
The aid is requested in the form of loans, grants and tax relief. The ask includes up to $25 billion in grants for passenger air carriers and $4 billion in grants to cargo carriers, and the same amounts in loans or loan guarantees. Airlines for America said in a release:
"US carriers are in need of immediate assistance as the current economic environment is simply not sustainable. This is compounded by the fact that the crisis does not appear to have an end in sight."
Two sources told CNN the aid package has been discussed with key lawmakers and staff, on Capitol Hill and in the Trump administration.
The discussions were described as being at an early stage. But one of the sources noted there is a growing recognition from the federal government that conditions "are getting very bad, very fast."
Airlines for America predicted the seven US airlines it represents could "run out of money completely sometime between June 30 and the end of the year" with losses that could be as high as $53 billion this year.
However, American Airlines (AAL) is up 6%.
Going to the gym might be the last thing on many people's minds these days, given worries about the coronavirus. But if you live in New York, New Jersey, Connecticut or Michigan, you don't even have the option.
These four states have issued executive orders to temporarily close gyms, as well as other crowded public places, to try to slow the outbreak. The CDC has also recommended avoiding places where there are groups of 50 or more people.
That's bad new for gym owner Planet Fitness (PLNT). Shares plunged almost 30% due to concerns about how the pandemic will impact membership growth. The stock has now lost half its value this year.
But investors seem to think this could be a boon for interactive bike maker Peloton (PTON). Its shares surged nearly 15% Monday. Still, the stock hit a new all-time low earlier in the day and remains about 25% below its IPO price.
Nervous consumers (maybe even including the woman from last year's oft-maligned holiday ad) may not be looking to spend on pricey exercise equipment anytime soon in this environment.
There's no way to sugarcoat this: The markets look terrible right now.
We're halfway through March and Wall Street is on track for its worst month in more than three decades.
The S&P 500, the broadest measure of American stocks, is down 16.9% so far this month -- putting it on track for its worst month since October 1987, when the infamous "Black Monday" market crash happened.