Wall Street is bracing for more turbulence — a day after the Dow Jones Industrial Average closed below 20,000 for the first time in three years.
At market open on Thursday, the Dow was down 1%, or more than 200 points, to 19,690, and fell more than 720 points before advancing 0.4%, or 100 points, in morning trading. Yesterday, the index sank 1,338 points to close under 20,000 for the first time since February 2017.
Separately, the S&P 500 opened the day with a loss of 1.3%, or 32 points, while the Nasdaq Composite dropped 0.8%, or 55 points. The benchmark indexes built on yesterday’s steep declines as the coronavirus outbreak continues to batter the U.S. economy.
Late Wednesday, the European Central Bank announced that it would buy 750 billion euros ($819 billion at current exchange) worth of bonds to support its economy amid the pandemic. It comes three days after the Federal Reserve declared that it would buy at least $700 billion worth of Treasurys and mortgage-backed securities and slash interest rates to almost zero.
What’s more, the Senate passed yesterday a multibillion-dollar emergency package that boosts unemployment insurance and guarantees free testing for COVID-19, which has led to nearly 150 deaths and infected more than 8,700 in the country. The measure follows congressional approval of an $8.3 billion sweeping spending bill toward preventative efforts and medical research.
An additional $1 trillion stimulus, proposed by the Donald Trump administration on Tuesday, would include $50 billion for the hard-hit airline industry and a small business interruption loan scheme as well as two rounds of direct-check payments to Americans worth up to a total of $500 billion. Details of the deal are still being finalized, with Republican and Democratic senators currently engaged in negotiations.
The spread of the virus also led the Intercontinental Exchange, which operates the New York Stock Exchange, to announce the closure of the Big Board’s physical trading floor. On Monday, the NYSE will shut down and temporarily switch to a fully electronic trading system after two employees tested positive for COVID-19. Although the NYSE has previously closed during other crises, such as the aftermath of the September 11 attacks, this marks the first time it will continue to trade electronically while the physical trading floor remains shuttered.
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