Wall Street suffered its biggest decline since 1987 with the S&P 500 closing at its lowest level since December 2018, as investors fear the coronavirus pandemic turns out to be more serious than central banks, lawmakers or the White House had expected.

The main New York Stock Exchange indexes ended the session into the red after US President Donald Trump said coronavirus pandemic situation is likely to persist through August, acknowledging existing recession risk for the US economy. The stock market situation remains highly turbulent despite the Federal Reserve’s decision to launch a new 700 billion USD bond purchasing program.

The blue-chip index Dow Jones Industrial Average wiped out 2,997.10 points, or 12.93%, closing the day at 20,188.52 points. Thus, the Dow reported the largest daily decline (by points) in its history and the second-largest decline by percentage.

The broader S&P 500 fell by 324.89 points, or 11.98%, to 2,386.13 points.

The technology Nasdaq Composite fell by 970.28 points, or 12.32%, to 6,904.59 points.

Earlier today, US President Donald Trump said the alarming situation with the spread of the coronavirus would remain until August. He told reporters that the US “may” be in recession.

On Monday, trading began with a 15-minute halt, after the S&P 500 fell by 8.14%.

Hours before the close of trading, the New York branch of the Fed announced that it would provide loans worth up to 500 billion USD to the so-called repo markets. This is the fourth intervention in the repo market in the last five trading days. The Central Bank cited “extremely unusual coronavirus-related violations that require it to provide liquidity”.

Late last night (March 15), the Fed lowered its base rate by one percentage point to zero from 0.25%. The central bank also announced a new bond purchase program, which is expected to cost at least 700 billion USD.

The Fed will keep interest rates close to zero “until it is convinced that the economy has withstood recent events and is set to reach its maximum employment and price stability goals”, the Federal Open Market Committee said in a statement. “This action will help support economic activity, strong labor market conditions, and inflation by returning to the Committee’s symmetrical target of 2%”, adds the statement.

The Fed’s move is accompanied by a White House decision to prepare consumer tax breaks and aid for airlines to boost investor optimism about the market.

In bond markets, yields on 10-year and 30-year US government bonds fell to 0.748% and 1.34 percent, respectively.

In the foreign exchange trade, the dollar index fell from 0.72% to 98.04 points.

Corporate stocks performance

The stocks of Alphabet, Microsoft and Facebook fell by 11.91%, 14.74%, and 14.88% respectively. Amazon and Apple reported a drop of 4.95% and 12.69% respectively.

JPMorgan Chase, Bank of America and Citigroup wiped out 14.96%, 15.38%, and 19.68% of their market capitalization.

The stocks of the airlines were also into the red. Delta Air Lines, United Airlines Holdings and Southwest Airlines declined by 6.64%, 14.82%, and 9.11%, respectively. However, American Airlines Group was the sole winner today, adding 11.25% to its market cap.

Within such turbulent markets, Boeing Co declined by 23.85% and Home Depot Inc was down by 19.79%.

Cruise companies were also hard hit by the decline of the Wall Street markets and coronavirus pandemic. Royal Caribbean Cruises declined by 7.39%, while Norwegian Cruise Line Holdings edged lower by 1.44%.

The top performers on the S&P 500 were American Airlines Group (+11.25%), ConAgra Foods Inc (+9.76%) and JM Smucker Company (+4.65%), while on the flipside were MGM Resorts International (-33.61%), Apache Corporation (-32.34%) and Capri Holdings Ltd (-30.65%).