US equities book worst week since 2008 amid coronavirus fears

0 Comment(s)Print E-mail Xinhua, March 22, 2020
Adjust font size:

Wall Street finished another brutal week with massive losses as investors grappled with fears over potential economic damage by the coronavirus pandemic.

For the week ending March 20, the Dow shed 17.3 percent, the S&P 500 fell 14.98 percent and the Nasdaq lost 12.64 percent. The major averages had their worst weekly performances since the financial crisis in 2008.

The stock market posted dramatic single-day moves amid the whirlwind of market volatility due to the blow from the unforeseen exogenous event of COVID-19 crisis.

On Friday, the 30-stock index surrendered more than 400-point gains to close 913.21 points lower at 19,173.98, representing the lowest level for the blue-chip gauge since Oct. 10, 2016. The S&P 500 was down 104.47 points to end at 2,304.92, marking its lowest level since Feb. 8, 2017. The Nasdaq shed 271 points to end at 6,879.52, a decline of 3.8 percent after hitting a high at 7,354.44 during the session.

With Friday's close, the Dow is off 35.1 percent from its Feb. 12 peak, while the S&P 500 is 32 percent and the Nasdaq is down nearly 30 percent from their Feb. 19 peaks, according to Dow Jones Market Data.

Trading was halted for 15 minutes both on Monday and Wednesday as a key circuit breaker was triggered after the benchmark S&P 500 declined by 7 percent.

The Cboe Volatility Index (VIX), Wall Street's preferred fear gauge, closed above 80 earlier in the week, topping its financial crisis peak.

Investors grew concerned over a possible economic recession as restrictions on travel, going into work, and activities in public spaces have put the economy on virtual lockdown, and the downstream effect of sharply lower spending is likely to soon result in job losses.

"The biggest change in what we know about the economic challenge posed by COVID-19 is the damage is not likely to pass in a month or two," analysts at FHN Financial said in a note on Friday.

"Increasingly, it appears there will be a sharp drop in global activity, followed by a period of significant weakness lasting at least two quarters, followed by a partial recovery," they noted.

Official data showed U.S. unemployment claims jumped as the coronavirus began to weigh on the economy.

In the week ending March 14, U.S. initial jobless claims, a rough way to measure layoffs, came in at 281,000, an increase of 70,000 from the previous week's unrevised level of 211,000, the Department of Labor reported on Thursday.

Stimulus effort and responses to the curb the COVID-19 impact are strengthening.

White House's National Economic Council Director Larry Kudlow said Saturday that the COVID-19 stimulus package under negotiation in the Senate could total about 2 trillion U.S. dollars.

The Senate introduced the bill on Thursday, outlining provisions to send direct cash payments for working Americans, provide federally guaranteed loans for small businesses and tax cuts for corporations, as well as offering financial support for airlines and other hard-hit industries.

Earlier this week, U.S. President Donald Trump signed a 100-billion-dollar bill to expand paid sick leave, enhance unemployment insurance, boost food assistance funding, and ensure free testing in response to the COVID-19 outbreak.

Last weekend, the Federal Reserve made an unprecedented second emergency rate cut over just a two-week period, bringing the benchmark rate to near zero. The central bank also launched a massive quantitative easing program, pledging to boost its bond holdings by at least 700 billion U.S. dollars as a means to keep long rates down and provide liquidity into capital markets.

"It appears that we are still in the early innings of winning the battle against COVID-19, and the stock market is likely to remain on edge as good and bad - but mostly bad - news floods the airwaves," analysts at Zacks Investment Management said in a note on Saturday.

The number of COVID-19 cases in the United States topped 20,000 as of 1:30 p.m. Eastern Time on Saturday (1730 GMT), according to the Center for Systems Science and Engineering at Johns Hopkins University. 

Follow on Twitter and Facebook to join the conversation.
ChinaNews App Download
Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Enter the words you see:   
    Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from