Stock Market Takes Another Dive as Coronavirus Fallout Spreads

Marco Green
March 26, 2020

US stocks ended higher after volatile trading on Tuesday that briefly sent the Dow below 20,000 for the first time in three years amid fears over the coronavirus pandemic.

The Dow Jones Industrial Average had gained 188 points, nearly 1%, when trading closed. The Nasdaq Composite finished around 345 points lower, down 4.7%, near 6,990.

In another sign that shell-shocked investors were becoming a little more willing to hold riskier assets, stocks of smaller companies rose far more than the rest of the market. The benchmark index recovered some of its earlier losses to close at 2,398.10, off 5.2 percent.

Oil prices had another jaw-dropping skid Wednesday, sending the price of USA crude oil below $22 a barrel for the first time since 2002.

The Dow Jones Industrial Average advanced 5.2% to 21,237.38.

Wall Street was gripped by panic despite stimulus measures taken by the US Federal Reserve.

In the meantime, while the USA government works to pass a fiscal stimulus plan, on Wednesday evening, the European Central Bank (ECB) announced a new Pandemic Emergency Purchase Program that will disseminate €750 billion ($819 billion) to buy securities to help bolster the European economy.

While the markets may bounce around based on the headlines, he added that "it's unlikely to bottom until we see that peak in new virus cases, so we just don't know when that will be".

The Dow fell as much as 10 per cent during the early afternoon, but stocks rallied somewhat near the end of the session as the US Senate passed a US$100 billion (S$144 billion) emergency package for free coronavirus testing, sick pay and other benefits related to the crisis.

The Dow Jones Industrial Average has lost all its gains since President Donald Trump's inauguration.

The Dow, now at its lowest level since 2016, had surged more than 5% on Tuesday after Trump promised massive aid to the economy, but the number of infections keeps climbing, topping 200,000 worldwide.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough, and those with mild illness recover in about two weeks.

That saw the key European index, the STOXX 600 jump 2.9%, with gains from 1.4% in London, to 2.68% in France.

In its latest attempt to minimize the fast transmission of Coronavirus, the NY stock exchange also declared on Wednesday that its historic trading floor will temporarily be shut down as it switched entirely to electronic trading. The Trump administration has pitched lawmakers on a program that could flood $1 trillion into the economy, including checks sent directly to households.

The NYSE said a floor trader and an NYSE employee had tested positive for the coronavirus, but that they had not entered the stock exchange building.

Other reports by Click Lancashire

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