Stocks plunged Monday as the Federal Reserve took emergency action to cushion the economy from the coronavirus pandemic.
U.S. stocks plunged Monday and were briefly halted for trading after the Federal Reserve took emergency action to cushion the economy from the coronavirus pandemic that is shutting down global business and travel.
The Dow Jones Industrial Average plunged more than 2,700 points and the benchmark Standard & Poor's 500 index dropped more than 7% — briefly triggering an automatic shock absorber for 15 minutes after the opening bell — after the central bank cut interest rates and launched a fresh round of crisis-era bond purchases. This marked the third time in a week that circuit breakers were set off during regular trading hours following sharp losses.
“Investors aren’t happy because these rate cuts won’t stimulate the economy in the near term. You can’t stimulate demand if everyone is stuck in their house,” says Shana Sissel, director of investment due diligence at Orion Advisor Solutions. “This isn’t a financial failure. This is a global pandemic that affects everyone across the globe. The quickest way to ramp everything back up is to provide them with a safety net in the meantime.
“If people are forced to stop working, they still have to pay rent at the end of the month,” says Willie Delwiche, an investment strategist at Baird. “This is a much bigger problem with an unknown solution than we’ve ever had in the past.” Investors were anxiously awaiting an aid package from Washington that investors hope can help cushion the economy from the slowdown in economic activity. The Senate is expected to vote Monday on legislation to provide economic relief to Americans affected by the deadly coronavirus pandemic. Trump said Friday he would support the sweeping measure.
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