· Stock futures point to more losses Friday following market’s worst day since ‘Black Monday’
Stock futures pointed to more pain ahead on Friday as they fell in overnight trading following major averages losing the most since the “Black Monday” market crash in 1987.
Futures on the Dow Jones Industrial Average lost about 250 points shortly after the open of overnight trading Thursday.
· Dow plunges 10% amid coronavirus fears for its worst day since the 1987 market crash
Stocks plummeted once again on Thursday after President Donald Trump and the Federal Reserve both failed to quell concerns over the economic slowdown stemming from the coronavirus, leading to a historic drop for the U.S. markets.
The Dow Jones Industrial Average closed 2,352.60 points lower, or 9.99%, at 21,200.62. The index had its worst drop since the 1987 “Black Monday” market crash, when it collapsed by more than 22%.The S&P 500 plummeted 9.5% to 2,480.64, joining the Dow in a bear market. The S&P 500 also had its worst day since 1987. The Nasdaq Composite closed 9.4% lower at 7,201.80.
- Bull market officially ends
The S&P 500 officially closed in a bear market on Thursday, down more than 26% from its record high set just last month. The Dow ended its historic 11-year bull market run a day earlier on Wednesday. A bear market marks a 20% decline from all-time highs. Now
Trading was halted for 15 minutes shortly after the open as an initial 7% drop triggered one of the “circuit breakers” at the New York Stock Exchange and Nasdaq. Before the open, futures contracts overnight tied to the major indexes fell to their so-called limit down thresholds, sliding 5%. These limit down levels act as a floor for selling until regular trading begins. They are used to ensure orderly markets. The halts did not stop the major averages from falling even further.
The Cboe Volatility Index (VIX), widely considered the best fear gauge on Wall Street, jumped to more than 76 and hit its highest level since 2008.
· European stocks close 11% lower in worst one-day drop ever on coronavirus fears
European markets posted their worst one-day drop in history on Thursday, as investors reacted to President Donald Trump’s decision to impose restrictions on travel to the U.S. from Europe, and the European Central Bank’s decision not to cut interest rates.
The pan-European Stoxx 600 had plummeted 11% by the close, with travel and leisure stocks sinking 12.8% following Trump’s announcement of a ban on European travel.
The U.K.’s FTSE 100 lost 9.8%, France’s CAC 40 shed 12.3% and Germany’s DAX fell 12.2%. Italian stocks finished nearly 17% lower, which was also the worst single-day loss for the FTSE MIB.
Trump said Wednesday that the U.S. will suspend all travel from 26 European countries to the U.S. for 30 days to curb the spread of coronavirus. The new rules will go into effect on Friday night. The measures will affect the nations in Europe that are part of the visa-free Schengen area. The U.K. and Ireland are exempted from the restrictions, as are American citizens who have undergone virus screening.
· Japan stocks briefly drop 10% as Asia Pacific markets sell off
Stocks in Asia Pacific saw heavy losses in Friday morning trade after shares of Wall Street saw a historic drop overnight, as fears over the global coronavirus outbreak continued to weigh on investor sentiment.
In Japan, the Nikkei 225 was among the biggest losers among the region’s major markets as it dropped 10.06% in morning trade following its Thursday close in bear market territory at 18,559.63 — more than 20% off its 52-week closing high. The Topix index dived 9.38%.
Over in Australia, shares tumbled, with the S&P/ASX 200 down 7.42%. The index fell into a bear market on Wednesday and saw losses of more than 7% on Thursday.
Meanwhile, South Korea’s Kospi also plunged 7.45% while the Kosdaq index fell 8.67%.
Overall, the MSCI Asia ex-Japan index fell 5.12%.
Reference: Reference, CNBC
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