(Reuters) – Wall Street’s main indexes slipped on Tuesday, a day after recording their biggest tumble since the crash of 1987, as efforts to contain the rapidly spreading coronavirus wreak havoc on the global economy.
The Federal Reserve’s shock move to cut interest rates to near zero on Monday sent the benchmark S&P 500 .SPX to late 2018 lows, marking its third-biggest daily percentage drop on record, beaten only by the 1987 rout and the Great Depression crash in 1929.
The main U.S. indexes had opened more than 1% higher but the gains soon evaporated in highly volatile trading.
“We have not experienced an issue like this in the last several decades, where it affects all industries and businesses everywhere in the world,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
As governments in the United States and Europe start shutting restaurants and schools, as well as asking people to stay home, several investors are concerned the current crisis could snowball into something bigger than a recession, including a credit crisis, or even a depression.
“A recession is a fairly high probability. The question is when does it start,” Frederick said.
Wall Street’s three main indexes have plunged about 30% from their record closing highs in mid February, ending the U.S. stock market’s longest-ever bull run.
The U.S. Senate on Tuesday prepared to weigh a multibillion-dollar emergency bill offering some economic relief from the outbreak.
At 10:03 a.m. ET, the Dow Jones Industrial Average .DJI was down 138.31 points, or 0.69%, at 20,050.21, the S&P 500 .SPX was up 1.85 points, or 0.08%, at 2,387.98. The Nasdaq Composite .IXIC was down 44.11 points, or 0.64%, at 6,860.48.
McDonald’s Corp (MCD.N) dropped 7.4% as it decided to close dine-in areas at many U.S. stores and shift to take-away and delivery services.
Boeing Co (BA.N) slumped 9.8% after the planemaker said it was in talks with senior White House officials and congressional leaders about short-term assistance for the entire U.S. aviation sector.
McDonald’s and Boeing were the biggest drags on the blue-chip Dow index.
Seven of the 11 S&P sectors were in the red, led by a 2.5% fall in consumer discretionary .SPLRCD stocks. Leading gainers, the defensive utilities .SPLRCU and consumer staples .SPLRCS rose more than 2%.
Healthcare stocks were another bright spot as Pfizer Inc (PFE.N) gained 4.7% after signing a deal with Germany’s BioNTech SE (22UAy.F) to co-develop a potential coronavirus vaccine.
Regeneron Pharmaceuticals Inc (REGN.O) jumped 9.9% after the company said it had identified antibodies to potentially treat COVID-19.
Declining issues outnumbered advancers for a 1.96-to-1 ratio on the NYSE and a 1.54-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 186 new lows, while the Nasdaq recorded two new highs and 584 new lows.
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