Dow drops below 20,000 for first time in more than three years
An early-morning rally in US stocks fizzled Tuesday — one day after they took their worst hit since the crash of 1987 — as investors awaited a stimulus package to stanch the economic bleeding from the coronavirus.
The Dow Jones industrial average — which had tumbled nearly 3,000 points on Monday after President Trump warned the virus could persist in the US through the summer — sank as much as 306.26 points, or 1.5 percent, to fall below 20,000 for the first time in more than three years.
The blue-chip index hit an intraday low of 19,882.26 within half an hour of jumping as much as 452.02 points, or 2.2 percent, in early trading. That was only slightly above where stocks closed on Jan. 20, 2017 — the day of Trump’s presidential inauguration. The Dow was recently off 70.22 points, or 0.4 percent, at 20,118.30.
The S&P 500 and the Nasdaq composite also jumped as much as 2.5 and 3 percent, respectively, after the open but followed the Dow into negative territory. The S&P was down 0.2 percent as of 10:02 a.m. while the Nasdaq was off 0.9 percent.
The slight market recovery had come amid reports that the Trump administration would seek an $850 billion stimulus package to prop up the US economy as the coronavirus forces businesses to close and slows down consumer spending. President Trump tweeted Monday that the government would “powerfully” support airlines and other industries that have taken a beating from the global outbreak.
“Promises of a coordinated fiscal, monetary and regulatory action initially helped US stocks rebound following the worst selloff since 1987,” Ed Moya, senior market analyst at OANDA, wrote in a commentary. “However, quarantine measures across both the US and Europe are intensifying and some investors are skeptical that any fiscal announcement will just trigger another selling opportunity.”
European stocks also bounced Tuesday morning after the massive selloff that started the week. But major indexes in London, Paris and Germany dipped into the red by the late morning and stayed there into the afternoon.
Reports of the White House’s hefty stimulus push followed the Federal Reserve’s emergency move to cut interest rates for the second time in a month on Sunday. Experts say investors are thirsty for fiscal action from the federal government to complement the Fed’s aggressive monetary policy moves.
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