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Global Stock Markets Worst in History
Published on: 2020-03-13
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030In a week that brought the wildest market swings since the financial crisis, Thursday hammered investors with something crazier -- a 10% drop in the Dow, the end of the longest bull market on record and the biggest sell-off since 1987’s Black Monday.

At the end of the day, the S&P 500 smoldered 27% below records set barely three weeks ago and wiped out all its gains since the end of 2018. The news was even worse overseas: Europe’s benchmark index suffered its worst day in history. Brazil’s Ibovespa tumbled as much as 20%, extending this year’s loss to almost 50% in dollar terms. Canada’s main gauge was off more than 12%, its worst day since 1940.

031The Dow fell 10%, the S&P 500 futures fell 10.6%, and the Nasdaq futures fell 10.5% in a stunning rout.

President Donald Trump finally offered some attempt at fiscal stimulus, but the measures fell flat. The European Central Bank took a stab by easing capital constraints and boosting liquidity, and losses only deepened. Not even an unprecedented plan for $5 trillion in bond-buying from the Federal Reserve could mollify investors rattled by the growing likelihood that the coronavirus will plunge the global economy into recession.

Ten-year Treasury yields erased declines and inched higher as policy makers’ liquidity pledge recalled the quantitative easing used during the financial crisis. Oil and precious metals fell, with palladium sinking more than 20%.

032hursday marked the greatest manifestation yet of how the one-two punch of the coronavirus and an oil-price war are destroying global growth prospects and fueling jitters around the world. Now investors are trying to guess at the effectiveness of policy makers’ efforts to limit economic damage, with Trump’s travel ban and tepid fiscal measures failing to impress most observers. Spirits were further damped by new bans on public gatherings in the U.S. and professional sports leagues’ move to suspend operations.

On another bruising day across markets:

The S&P 500, Nasdaq Composite and Nasdaq 100 indexes are all in a bear market now, with losses from February closing records extending well past 20%.The slump triggered the second 15-minute trading halt this week shortly after the U.S. open.The MSCI All-Country World Index extended losses to enter bear-market territory.The cost of insuring debt issued by Europe’s investment grade companies surged to the highest since 2016.Japanese stocks closed more than 4% lower even after another liquidity pledge from the country’s central bank. Australian shares sunk deeper into a bear market despite a stimulus plan there.Oil extended losses past 5%. Bitcoin took a dive. Gold fell below $1,600 an ounce.

More bad news about the impact of the coronavirus emerged throughout the day. The leading U.S. infectious-disease official said the testing system in the country is “a failing.” The European Union warned the sickness threatens to exceed health-care capacity across the region “in a few weeks or even days.” The National Hockey League followed the National Basketball Association’s lead and suspended its season, while Major League Baseball said opening day would be delayed.

Meanwhile, signs that companies in the hardest-hit industries were drawing down credit lines to battle the effects of the virus on their businesses added to anxiety.

Stocks

The S&P 500 Index declined 9.5% at the close of trading in New York; the Dow Jones Industrial Average lost 10%.The Stoxx Europe 600 Index fell 11%.The MSCI Asia Pacific Index dipped 5.4%.The MSCI Emerging Market Index sank 6.6%.

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