Coronavirus: United States, British stock markets crater to horror lows

The S&P 500 and the Nasdaq cratered into a bear market on Thursday (local time) as a shock move by President Donald Trump to suspend travel from Europe rattled investors already shaken by fears of a global recession on the back of a coronavirus pandemic.

Trading on Wall Street was halted minutes after the opening bell as the S&P 500 slid 7 percent and triggered a 15-minute cutout. The indexes are now more than 24 percent below their intraday record highs hit in February.

The announcement knocked the S&P 1500 airlines index .SPCOMAIR down 10.1 percent with cruise liners Carnival Corp and Royal Caribbean Cruises Ltd shedding 17 percent and 24 percent, respectively.

Boeing slumped another 15 percent after J.P.Morgan cut its long-term "overweight" rating on the planemaker's shares. The stock, already under pressure from the grounded 737 MAX jets, has lost more than 40 percent this year on the added hit from the virus outbreak.

American Airlines and United Airlines plummeted over 13 percent.

"It's not just the fear of the economy going weak, but basically being on the brink of shutting down," said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.

"It's mass selling across the board (and) we are pricing in a potential to go into another financial crisis."

Investors were also unnerved by the absence of targeted stimulus measures and the lack of details on a public health response after Trump made no mention of widely expected payroll tax cuts.

Online travel agents Expedia Group Inc and Booking Holdings Inc, as well as hotel operator Marriott International and casino operator Wynn Resorts shed more than 10 percent.

Wall Street's fear gauge jumped about 15 points to its highest since November 2008 at 68.76, as the death toll from the virus rose to over 4,600 worldwide, according to a Reuters tally.

At 3:02am NZT, the Dow Jones Industrial Average was down 1,867.08 points, or 7.93 percent, at 21,686.14, while the S&P 500 was down 188.00 points, or 6.86 percent, at 2,553.38. The Nasdaq Composite was down 515.77 points, or 6.49 percent, at 7,436.28.

Declining issues outnumbered advancers for a 29.70-to-1 ratio on the NYSE and a 24.79-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 301 new lows, while the Nasdaq recorded one new high and 1,264 new lows.

Britain

London's stock market fell past 2016 Brexit referendum lows on Thursday due to the travel ban. Already hard-pressed British Airways and other airlines down by almost another 10 percent.

The bluechip FTSE 100 at one point slid past 2016 lows to touch levels not seen since the height of the European debt crisis in 2012.

The index was last down 5.8 percent at 5535.54 points, with all the stocks trading in the red.

Although the United Kingdom was spared from the travel restrictions, fears were widespread over its impact on the travel sector.

Shares of British Airways , EasyJet and WIZZ Air, which have already had to axe flights to and from Italy, fell between 6 percent and 10 percent.

Symbolic of the extent of economic damage from the outbreak, cinema operator Cineworld shed more than 30 percent as it said that in the worst-case scenario, the outbreak could cast doubt over it ability "to continue as a going concern."

The FTSE index has shed about 28 percent since its January peak, as the heavy blow from the outbreak shook investor confidence despite the Bank of England's emergency move to cut interest rates by 50 basis points and the UK government's 30 billion-pound ($39 billion) stimulus plan.

"Each time that you've seen stimulus announced, any rebound has been very short-lived," said Joshua Mahony, senior market analyst at IG. "That's because you can't cure someone of a virus and the need to quarantine by giving them cheaper interest rates, or quantitative easing."

Oil majors BP Plc and Royal Dutch Shell Plc  slipped between 3 percent and 5 percent, as oil prices took another blow from the dramatic moves by Trump.

Among other stocks, specialist pension provider Just Group slipped 5.2 percent after posting lower annual profit hurt by tough operating environment. Shopping mall operator Intu Properties slid 15.5 percent as it flagged doubts over its continuity and posted wider annual loss hurt by decline in real estate valuations against a tough retail backdrop.

Reuters

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