Dow drops more than 900 points after Cuomo orders statewide lockdown - New York Post

US stocks slid Friday afternoon as Wall Street got spooked by fresh moves to contain the coronavirus, including a statewide lockdown by New York Gov. Andrew Cuomo.

The Dow Jones industrial average tumbled 913.21 points, or 4.6 percent, to close at 19,173.98. That was after it rose nearly 350 points in early trading, as Gov. Cuomo ordered all non-essential businesses to close and residents to stay home beginning Sunday evening.

The S&P 500 and the Nasdaq — which, like the Dow, had rallied in the morning on aggressive moves by central banks to contain the coronavirus crisis — also wiped out their opening gains to close 4.3 percent and and 3.8 percent lower, respectively.

In addition to Cuomo’s clampdown, President Trump on Friday banned all non-essential travel between the US and Mexico after enacting a similar ban across the Canadian border earlier this week.

“What you have is a government-induced shutdown and then you have the ramifications of that shutdown, which are that the economy continues to weaken and that unemployment continues to rise,” said Quincy Krosby, chief market strategist for Prudential Financial.

Escalating fears about the coronavirus pandemic plunging the world into a recession have put Wall Street on track to close the week deep in the red despite a small rebound on Thursday.

The Dow shed 4,000 points this week as it posted a record, single-day point loss of nearly 3,000 and closed below 20,000 for the first time in three years. It was the Dow’s worst week since the 2008 financial crisis, leaving the index 35 percent off its February highs. All three indexes were off more than 11 percent this week as fears about the pandemic’s threat to the economy deepened.

Investors aren’t likely to feel all that calm until there’s a treatment for the virus that can be widely distributed around the world, according to Jason Ader, CEO of SpringOwl Asset Management.

“I think the volatility’s here to stay until that moment where the average person in the street feels, ‘If I get it, at least it’s like a cold and a flu and I’ll be OK,’” Ader said.

Friday’s selling came followed the Thursday bounce that came as a barrage of central bank actions aimed at shoring up the economy appeared to finally encourage investors.

The Bank of England slashed its benchmark interest rate to near zero on Thursday, following similarly aggressive monetary policy moves from the Federal Reserve and the European Central Bank.

“The shoulder-launched artillery barrage from the worlds’ central banks and government treasuries seems to have stopped the rot sweeping the global economy for now,” Jeffrey Halley, senior currency analyst at OANDA, wrote in a commentary.

But markets will likely remain volatile as the coronavirus continues to spread across the US and Europe while Congress crafts a $1 trillion fiscal stimulus package to help stanch the economic bleeding.

The number of Americans applying for unemployment claims is expected to skyrocket as the pandemic forces businesses to lay off workers, with Goldman Sachs predicting 2.25 million.

That could spur the Fed and Congress to take further action, Krosby said.

“As the unemployment rate rises and rises dramatically, chances are you’re going to see even more stimulus,” she said.

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Dow drops more than 900 points after Cuomo orders statewide lockdown - New York Post
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