US stock index sheds $2 trillion in value

Cut in interest rates by Fed adds to alarm while traders worry pandemic is paralysing supply chains

WASHINGTON: S&P 500 companies lost more than $2 trillion in value in the first few minutes of trading on Monday as investors panicked about the mounting damage from the coronavirus pandemic on the global economy.

Trading on the three main US stock indices was halted for 15 minutes at the open, the third such pause in six days, as the benchmark index plunged 8% and triggered an automatic cutout.

A sharp cut in interest rates by the Federal Reserve to near-zero only added to the alarm, while traders were worried that the pandemic was paralysing supply chains and squeezing company finances.

Rate-sensitive financial stocks plunged 12.6%, leading declines among the major S&P sectors. Energy stocks tracked a 10% slump in oil prices, while technology stocks also shed 10%.

Apple Inc, Amazon.com and Microsoft Corp together lost nearly $300 billion in market value. Wall Street's fear gauge jumped 13 points to 70.83.

"The fear factor is going through the roof this morning," said Peter Cardillo, Chief Market Economist at Spartan Capital Securities in New York.

"Markets are spooked by the emergency of the central banks stepping in and adding billions of dollars of liquidity."

World stocks plummeted 8%, oil prices slumped 10% and even safe-haven gold took a hit as France and Spain joined Italy in entering a virtual lockdown to contain the fast-spreading disease. Restaurants, theaters and movie houses in New York and Los Angeles were ordered shut.

Underscoring the economic blow of the outbreak, severe virus containment measures sent China's factory production tumbling at its fastest pace in three decades.

At 10:14 am ET, the Dow Jones Industrial Average was down 2,326.15 points, or 10.03%, at 20,859.47, while the S&P 500 was down 263.50 points, or 9.72%, at 2,447.52. The Nasdaq Composite was down 747.03 points, or 9.49%, at 7,127.84.

Another 1,000-point dip for the Dow will wipe out the entire Trump-bump, taking the index to levels seen before the presidency of Donald Trump.

The S&P 500 retail index fell 9.3% as Nike Inc, Lululemon Athletica Inc and Under Armour Inc said they would close stores in the United States and some other markets.

The S&P 1500 airlines index slumped 16.3% as United Airlines Holdings Inc's March revenue fell $1.5 billion and the airline warned employees that planes could be flying nearly empty into the summer.