US Stocks Drop +10% over Coronavirus Pandemic Panic

By Staff, Agencies

US stocks plunged over 10 percent as panic following emergency moves by the Federal Reserve to try to avert a recession due to the coronavirus pandemic that is shutting down global business and travel.

About 25 minutes into trading on Monday morning, the Dow Jones Industrial Average stood at 20,669.42, down 10.9%, or around 2,500 points.

The steep losses earlier triggered an automatic shock absorber for 15 minutes. This marked the third time in a week that circuit breakers were set off during regular trading hours following sharp losses.

Sunday announced a series of drastic emergency measures to boost confidence, including lowering interest rates to a range of 0-0.25%, where it was during the 2008 global financial crisis.

The Fed also removed reserve requirements to allow banks to use cash backstops to meet unexpected funding needs.

"The Fed's actions, while well intended, have had an opposite effect on investor sentiment," said Briefing.com analyst Patrick O'Hare.

"They have generated fear, not confidence, as the spread and scope of their actions resonates now as more of a 'catch-up' action than a pro-active action," he added.

There are now 3,700 confirmed cases of the coronavirus in the US and at least 69 people have died so far, according to data compiled by the World Health Organization, the Centers for Disease Control and Prevention and Johns Hopkins University.

American schools have been closed and millions of jobs are in jeopardy as businesses temporarily closed down.