· Dow drops 1,400 points and tumbles into a bear market, down 20% from last month’s record close
The coronavirus-induced sell-off reached a new low on Wednesday as Wall Street grappled with the rapid spread of the virus as well as uncertainty around a fiscal response to curb slower economic growth resulting from the outbreak.
The Dow Jones Industrial Average tumbled 1,464.94 points, or 5.9%, to close at 23,553.22. The 30-stock average closed in a bear market, down more than 20% below the record close set only last month and putting to end an expansion that started in 2009 amid the financial crisis.
The S&P 500 ended the day 4.9% lower at 2,741.38 and just short of a bear market. The Nasdaq Composite fell 4.7% to 7,952.05 and was also about 19% below its all-time high. A 20% decline is considered a bear market on Wall Street. However, most investors don’t recognize it officially until an index does it on a closing basis.
· CME to close Chicago trading floor on coronavirus concerns
Exchange operator CME Group Inc (CME.O) said on Wednesday it would close its Chicago trading floor after business hours on Friday to reduce large gatherings that can contribute to the spread of the coronavirus.
“The reopening of the trading floor will be evaluated as more medical guidance on the coronavirus becomes available,” CME Group, which owns the Chicago Board of Trade and Chicago Mercantile Exchange, said in a statement.
· European markets close lower as coronavirus concerns persist; Bank of England cuts rates
European markets closed lower Wednesday, reversing course as investors closely monitored the spread of the coronavirus.
The pan-European Stoxx 600 closed down 0.7%, having been up more than 2% earlier in the day. Travel and leisure stocks dropped 4% to lead losses while banks and chemicals stocks climbed nearly 1%.
The Bank of England (BOE) on Wednesday morning announced an emergency cut to interest rates in an attempt to limit the economic impact from the new coronavirus.
The central bank lowered its main interest rate from 0.75% to 0.25% and announced a new term-funding scheme to support small and medium-sized businesses, along with measures to help commercial banks lend more.
New U.K. Finance Minister Rishi Sunak then announced fiscal stimulus measures on Wednesday afternoon valued at around £30 billion ($39 billion), including targeted tax cuts and backstopping loans for small businesses. Sunak said the measures were part of a coordinated effort alongside the BOE to insulate the economy.
· Asia stocks drop as Dow enters bear market; WHO declares coronavirus outbreak a pandemic
Asia stocks fell in morning trade on Thursday after the Dow Jones Industrial Average plunged into bear market territory overnight as the World Health Organization (WHO) declared the coronavirus outbreak a global pandemic.
In Japan, the Nikkei 225 declined 1.74% in early trade while the Topix index fell 1.78%. South Korea’s Kospi slipped 0.84%.
Meanwhile, shares in Australia dropped in morning trade, with the S&P/ASX 200 down 2.64%.
Overall, the MSCI Asia ex-Japan index traded 0.62% lower.
Investors await an Oval Office speech by U.S. President Donald Trump at 9 p.m. ET Wednesday, where he is expected to unveil details of his economic stimulus plan to deal with the economic impact of the coronavirus outbreak.
That comes after the WHO declared COVID-19 a global pandemic on Wednesday.
Reference: CNBC, Reuters
Thai
Eng