Wall Street took yet another hammering on 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 government wrestle with the mounting fallout from the coronavirus pandemic.
The S&P 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 fell 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.
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The market meltdown comes despite a series of sweeping measures intended to address the growing economic damage, including a trillion-dollar stimulus package from the White House. Drastic and unprecedented action from the Federal Reserve have 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 against the impact, with Detroit’s top three automakers announcing Wednesday they would be halting production at all plants. Crude oil also dropped to its lowest level in 18 years, and the U.S. announced 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.
“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,” DoubleLine Capital CEO Jeffrey Gundlach told CNBC, adding that it was “ludicrous” to think the U.S. would not enter a recession.
“There will be an end in sight,” Treasury Secretary Steven Mnuchin said in a phone interview on Wednesday. “We’re going to make sure that companies have money so they can continue to pay their employees.”