Stocks were set for another volatile session on Wednesday, with worldwide cases of the coronavirus soaring above 200,000, which forced governments around the world to consider imposing stricter measures to prevent further spreading.
Traders were also booking some profits after a brisk rally helped investors recoup some of Monday’s ugly losses that pushed the Dow Jones Industrial Average to its worst day since Black Monday of 1987.
In pre-market action, contracts on the major indices tumbled enough to reach their “limit down” floor, preventing them from trading any lower. The lower limit is established each day by CME Group and represents a decline of about 5% on the indices.
[Read more: Coronavirus jitters send Dow swooning to worst-ever point loss, closes at near 3-year low]
The coronavirus pandemic continues to keep investors on edge, as one major economy after the other shuts its borders to stem the outbreak. On Tuesday, Wall Street soared after the Trump administration floated a fiscal pump-priming package to ward off the effects of the COVID-19 outbreak that’s cascading across the global economy. With both Democrats and Republicans coalescing around the urgent need to backstop consumers, the stimulus is likely to top $1 trillion.
Coronavirus cases topped 200,000 mark on Wednesday. Over 100 countries are battling the virus.
According to Eurasia Group’s Todd Mariano, “the most powerful factor spurring Congress forward will continue to be the deterioration of the US economy as it experiences a historic shutdown. More than anything else, even outweighing electoral considerations, this has served to supersede partisan politics and concentrate minds in lightning fashion over the past ten days, and that will likely continue over the next few weeks.”
Monetary policymakers also stepped in with further stimulus Tuesday. In a move anticipated by many market participants, the Federal Reserve announced Tuesday it would be relaunching its financial crisis-era Commercial Paper Funding Facility, a program helping give U.S. companies increased access to financing amid the pandemic-related disruptions.
However, Tuesday’s bounce in risk assets was not enough to undo the damage wrought by a viral outbreak that has a stranglehold on over 100 countries — and driven stocks from record highs to a bear market in just under a month.
Volatility stemming from the outbreak has seen the Dow move up or down by 1000 points or more for 7 straight days, and 11 times total in the last month, according to Yahoo Finance data.
9:30 a.m. ET: Stocks tumble at the opening bell
Black Wednesday, here we come: Wall Street immediately hit the collective sell button at the opening bell, with beleaguered investors spooked by the worsening coronavirus pandemic, and no immediate answers on how to contain soaring infection rates.
Here’s where the major indexes opened as of 9:30 ET:
S&P 500 (^GSPC): 2,388.98, down 140.21 or -5.54%
Dow (^DJI): 20,002.76, down 1,234.62 or -5.81%
Nasdaq (^IXIC): 6,985.77, down 349.01 or -4.76%
Crude (CL=F): $23.84 per barrel, -$3.11 or -11.54%
Gold (GC=F): $1,509.40, down -$16.40 or -1.07%
10-year Treasury (^TNX): 1.095, up +0.098
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8:30 a.m. ET: Housing starts fall less than expected for February, but building permits post steeper than anticipated drop
New housing starts dropped just 1.5% month on month to a seasonally adjusted annual rate of 1.599 million in February, the Census Bureau said Wednesday, coming in ahead of expectations for 1.500 million, according to Bloomberg data. The results suggested a still-strong housing market heading into the coronavirus outbreak escalation in the U.S.
January’s housing starts were upwardly revised to see a 1.4% month on month gain to 1.624 million, from the decline of 3.6% to 1.567 million previously reported.
Building permits, a proxy for future home-building, dropped more than expected, however. Permits for new-home construction fell 5.5% month over month to a seasonally adjusted annual rate of 1.464 million in February. Consensus economists had expected building permits to come in at a seasonally adjusted annual rate of 1.500 million for the month. In January, building permits had surged more than 9% to 1.550 million.
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7:59 a.m. ET: FedEx shares fluctuate after beating third-quarter expectations, suspending outlook due to COVID-19
Shares of FedEx (FDX) were volatile during the Tuesday to Wednesday overnight session, as investors weighed the impact of the COVID-19 outbreak on the shipping giant’s outlook.
For the three months ended February 29, FedEx reported adjusted earnings of $1.41 per share on revenue of $17.5 billion. This beat expectations on both measures, with consensus analysts looking for $1.27 per share on revenue of $16.82 billion, according to Bloomberg data.
However, FedEx suspended its full-year 2020 guidance amid uncertainty caused by the coronavirus outbreak. While the company said it is beginning to see a cargo rebound in China – the original epicenter of the coronavirus outbreak – it is expecting demand in Europe to drop as the virus escalates in that region.
“We are anticipating more softness there in Europe, but the U.S. is strong, and Asia is in really good shape as we speak today,” FedEx chief marketing and communication officer Brie Carere said during a call with analysts Tuesday.
FedEx shares dropped 4.7% Wednesday morning, turning around after rising more than 7% Tuesday evening after results were initially released.
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7:17 a.m. ET Wednesday: Stock futures tumble, triggering a trading halt
Futures for the three major indices dropped early Wednesday, signaling another session of sharp declines in the markets. Earlier, contracts on the S&P 500, Dow and Nasdaq slid enough to reach their lower trading limit for the session, preventing further losses.
Here were the main moves in markets, as of 7:18 a.m. ET:
S&P 500 futures (ES=F): 2,393.50, -92.00 or -3.7%
Dow futures (YM=F): 20,145.00, -821.00 or -3.92%
Nasdaq futures (NQ=F): 7,077.25, -328.00 or -4.43%
Crude oil (CL=F): $25.38, -$1.57 or -5.83%
10-year Treasury note: yielding 1.119%, or up 12.3 basis points
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6:15 p.m. ET Tuesday: Stock futures up slightly in early trading
Futures for each of the three major indices were up slightly as the Asia trading session got underway, after a big rally helped the Dow claw back from a nearly 3,000 point dive.
Here were the main moves in markets, as of 6:15 p.m. ET:
S&P 500 futures (ES=F): 2,484.00, -1.50 or -0.06%
Dow futures (YM=F): 20,829.00, -31.00 or -0.15%
Nasdaq futures (NQ=F): 7,373.00, -19.25 or -0.26%
Crude oil (CL=F): 26.72, -0.23 or -0.85%
NEW YORK, March 16, 2020 — Traders work on the floor at the New York Stock Exchange in New York, the United States, March 16, 2020. (Photo by Michael Nagle/Xinhua via Getty) (Xinhua/Michael Nagle via Getty Images)
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