Dow ends down over 900 points in wild Friday action, as stocks book worst week since 2008 amid coronavirus panic

A big 11% skid in crude-oil prices may have helped to hasten selling on Wall Street late in the session

Markets turn south in midday Friday action
Markets turn south in midday Friday action

Published: March 21, 2020 at 10:27 a.m. ET, By Mark DeCambre

U.S. stock indexes finished another bruising week with sharp losses as panic over the coronavirus outbreak refused to abate, amid the acceleration of the global death toll. Investors haven’t yet been comforted by the government’s response to limit the economic impact of COVID-19 pandemic, whose severity and duration is unclear, and an early Friday rally faded fast.

Some volatility in Friday’s trade may be attributed to the so-called quadruple witching, the simultaneous expiration of single-stock options and futures and index options and futures.

How are major benchmarks performing?

The Dow Jones Industrial Average US:DJIA fell 913.21 points, or 4.6%, at 19,173.98, representing the lowest level for the blue-chip gauge since Oct. 10, 2016, even after the index touched an intraday high at 20,531.26 on Friday. The S&P 500 index US:SPX closed at 2,304.92, down 104.47 points or 4.3%, marking its lowest level since Feb. 8, 2017. Meanwhile, the technology-heavy Nasdaq Composite Index US:COMP shed 271 points to end at 6,879.52, a decline of 3.8% after hitting a high at 7,354.44 on the session.

For the week, the Dow lost 17.3% weekly decline, the S&P 500 was set to fall 14.98% on the week, while the Nasdaq was looking at an 12.64% weekly drop.

The Dow is off 35.1% from its Feb. 12 peak, while the S&P 500 is 32% and the Nasdaq is down nearly 30% from their Feb. 19 peaks, according to Dow Jones Market Data.

What’s driving the market?

Lawmakers in Washington, D.C., hurried to assemble a second bailout package to help lessen the current and anticipated economic pain from the pandemic, but not fast enough for Wall Street, with stocks marking their worst week since the 2008 financial crisis.

“Late into an extraordinary week we are feeling a little bit better about the escalating economic policy response to the virus crisis though it is nowhere near complete and we worry that essential next steps are not secured yet,” wrote Krishna Guha, vice chairman of Evercore ISI, in a Friday research note.

More than 14,000 cases have been confirmed in the U.S. along with over 200 deaths, according to data from Johns Hopkins University. Globally, more than 245,000 cases have been confirmed.

On Friday, President Trump said that interest on student loans would be waived temporarily and earlier, Treasury Secretary Steven Mnuchin said that the U.S. tax filing day in the U.S. would be moved to July 15, extending the deadline from April 15.

Meanwhile, Mitch McConnell, the Republican Senate Majority Leader, on Thursday introduced a stimulus package that could top $1 trillion and would include direct payments of $1,200 for individuals and with married couples eligible to for $2,400, according to the Wall Street Journal.

The Senate proposal comes as reports show that jobless claims could soar to more than 2 million by next week, according to a research report analysts at Goldman Sachs.

A Thursday a report on claims from those seeking unemployment benefits showed that 281,000 Americans filed for unemployment insurance for the first time in the March 14 week, the highest since 2017.

Attempts to soften the blow to businesses and individuals also come as New York Gov. Andrew Cuomo ordered all nonessential businesses to close and said residents should stay home amid the pandemic. California on Thursday also ordered its roughly 40 million residents to remain at home to help limit the spread of the pathogen.

US stock market volatility has not been this extreme since Black Monday in 1987 and Black Monday in 1929 even as the Federal Reserve bought at least $300 billion in securities this week to provide liquidity. For the Dow Jones Industrial Average it has been the worst four week stretch on record with a fall of 33.87% over the last four weeks according to Dow Jones Market data.

Read: Here’s a breakdown of the Fed’s rescue programs to keep credit flowing during the pandemic

In economic news, sales of previously owned U.S. homes surged in February to a 5.77 million annual rate, according to National Association of Realtors data released Friday, representing the fastest pace in 13 years.

Read: Mortgage rates surge to highest level since January even though the Fed just brought interest rates to 0%

How are other markets trading?

The yield on the benchmark 10-year Treasury note BX:TMUBMUSD10Y fell 20.7 basis points to 0.91% on Thursday.

West Texas Intermediate crude, the U.S. gauge of oil prices US:CLK20 was $2.69, or 10.7%, lower at $22.53 a barrel after its sharpest daily gain on record on the New York Mercantile Exchange, punching higher from its lowest level since 2002 on Wednesday.

In precious metals, gold futures for April US:GCJ20 rose $5.30, or 0.4%, to settle at $1,484.60 an ounce on Comex. For this week, prices for the most-active contract lost 2.1%, according to FactSet data.

The ICE U.S. dollar index, US:DXY which tracks the greenback’s performance against a basket of currency trading peers, rose 0.1%, adding to a string of gains.

Japan’s Nikkei Index JP:NIK was closed in observance of the Vernal Equinox. Meanwhile, China’s CSI 300 XX:000300 gained 1.8%, while the Shanghai Composite Index CN:SHCOMP closed up 1.6% and the Hang Seng Index HK:HSI in Hong Kong surged 5.1%, while Korea’s Kospi Index KR:180721 closed 7.4% higher.

The Stoxx Europe XX:SXXP traded 2.6% higher, while the FTSE 100 FR:FTSE added 1.8%.

Which stocks are in focus?

Shares of FedEx Corp. US:FDX closed down 0.6% in Friday action, reversing an earlier gain as delivery companies were seen as performing well during the coronavirus outbreak.

Shares of Amazon.com US:AMZN was down 1.9% after gaining 2% earlier.

Shares of meal-kit company Blue Apron US:APRN, however, fell 30% on the day but up 345% for the week.

Source: www.marketwatch.com

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