Stocks resume trade after circuit breaker; S&P -7.5%

Stocks opened with a 15-minute circuit breaker after the S&P 500 fell 7% and joined the Dow and Nasdaq in bear market territory; after an initial 7.5% drop, S&P 500 now -7.9%, Dow -8.5%, Nasdaq -7.7%.

Pres. Trump suspended travel from Europe excluding the U.K. for 30 days in an effort to mitigate the spread of the coronavirus and promised financial relief for workers who are ill or caring for others, but the moves were not specific enough to satisfy investors.

Also exacerbating recession fears are the NBA’s suspension of its basketball season, Carnival halting operations for Princess Cruises for 60 days, and many more businesses taking actions to protect employees and/or preserve their balance sheets.

Update: The U.S. Capitol, House and Senate office buildings will be closed to the public until APril 1.

“Markets simply don’t know what the next steps are in terms of the virus spread,” says Edward Park, deputy chief investment officer at Brooks Macdonald. “We will see a dip in global growth in Q1 and Q2 and all the fiscal stimulus out there can’t avoid that.”

The U.S. travel ban and the European Central Bank’s decision not to cut interest rates have sent European bourses reeling, with France’s CAC -9.3%, Germany’s DAX -8.7% and U.K.’s FTSE -8.2%; in Asia, Japan’s Nikkei -4.4% and China’s Shanghai Composite -1.5%.

In the U.S., S&P sector opening losses ranged from -4.6% for consumer staples to -7.7% for utilities.

U.S. Treasury prices are back on the rise after two days of selling, sending the 10-year yield down 16 bps to 0.67% and the two-year yield 12 bps lower to 0.39%; U.S. Dollar Index +0.6% to 97.09

WTI crude oil -8.4% to $30.19/bbl, below Monday’s four-year low settlement price.

https://seekingalpha.com/news/3551060-stocks-resume-trade-after-circuit-breaker-s-and-pminus-7_5