Traders work on the floor of the New York Stock Exchange (NYSE) on March 09, 2020 in New York City. As global fears from the coronavirus continue to escalate, trading was halted for 15 minutes after the opening bell as stocks fell 7 percent. (Photo by Spencer Platt/Getty Images)
By Stan Choe
Fear gripped financial markets around the world Monday as stock prices and bond yields plunge on worries about the effects of a new coronavirus.
The most violent drops came from the oil markets, where prices cratered more than 20%. But moves in stocks and bond yields were nearly as breathtaking. In the United States, the S&P 500 plunged 7% in the first few minutes of trading, and losses were so sharp that trading was halted.
The Dow Jones Industrial Average lost 1,582points, or 6.1%, after briefly being down more than 2,000. The S&P 500 lost 5.8% and the Nasdaq gave up 5.5%.
European stocks dropped more than 8%. Treasury yields careened to more record lows as investors dove into anything that seems safe, even if it pays closer to nothing each day.
All the selling is the result of fear of the unknown. As COVID-19 spreads around the world, many investors feel helpless in trying to estimate how much it will hurt the economy and corporate profits, and the easiest response to such uncertainty may be to get out. After initially taking an optimistic stance on the virus — hoping that it would remain confined mostly in China and cause just a short-term disruption — investors are realizing they likely woefully underestimated it.
The virus has infected more than 110,000 worldwide, and Italy on Sunday followed China’s lead in quarantining a big swath of its country in hopes of corralling the spread. That sparked more fears, as quarantines would snarl supply chains for companies even more than they already have.
The new coronavirus is now spreading on every continent except Antarctica and hurting consumer spending, industrial production, and travel.
The S&P 500 has lost 17% since setting a record last month. If it hits a 20% drop, it would mean the death of what’s become the longest-running bull market for U.S. stocks in history. Monday actually marks the 11th anniversary of the market hitting bottom after the 2008 financial crisis.
The circuit breaker tripped in the U.S. stock market is meant to slow things down and give investors a chance to breathe before trading more.
The yield on the 10-year Treasury note plunged to 0.49%. Early last week, it had never been below 1%.
Brent crude, the international standard, lost $10, or 22%, to $35.27 per barrel. Benchmark U.S. crude fell $8.91, or 20%, to $32.37.
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A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
