Wall Street took yet another hammering Wednesday, with the Dow Jones Industrial Average closing with a loss of just over 1,300 points, or 6 percent, as investors continue to flee financial markets.
After some volatile swings in trading, all three major indices closed sharply lower, propelled by a slew of negative economic news as companies and the government wrestle with the mounting fallout from the coronavirus pandemic.
The S&P 500 was down by 5 percent, and the tech-heavy Nasdaq fell by 6 percent, with trading halted for 15 minutes earlier in the day after S&P losses accelerated past 7 percent, the point at which a “circuit breaker” is triggered.
At session lows, the Dow had fallen by more than 2,000 points, pushing the blue-chip index once again below the level at which it closed the day before President Donald Trump took office on Jan. 20, 2017.
The market meltdown comes despite a series of sweeping measures to address the growing economic damage, including a trillion-dollar stimulus package from the White House. Drastic and unprecedented action from the Federal Reserve has also failed to move the needle, including two emergency rate cuts and a credit measure to keep money flowing to businesses and households.
Businesses continue to brace themselves, with Detroit’s top three automakers announcing Wednesday that they would halt production at all plants. Crude oil also dropped to its lowest level in 18 years, and the U.S. announced that it would be closing its border with Canada. Restaurants and bars are shuttering their doors, small businesses are flailing and even major corporations, such as Marriott, are furloughing thousands of employees.
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“When you decimate the restaurant industry, the travel industry, the hotel industry, the airline industry … the cruise line industry, obviously you’re going to take a huge divot out of economic activity,” Jeffrey Gundlach, CEO of DoubleLine Capital, told CNBC, adding that it was “ludicrous” to think the U.S. would not enter a recession.
Treasury Secretary Steven Mnuchin said in a phone interview Wednesday: “There will be an end in sight. We’re going to make sure that companies have money so they can continue to pay their employees.”
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