NEW YORK, March 11 — Wall Street stocks fell further in mid-morning trading today amid rising evidence the coronavirus outbreak could slow the US economy, posing significant recession risk.
A survey showed that nearly three-quarters of American firms have suffered supply disruptions due to the virus, while hotel chain Hilton became the latest big company to withdraw its earnings forecast due to the clouded economic forecast.
Near 1500 GMT, the benchmark Dow Jones Industrial Average was down about 900 points, or 3.6 per cent, at 24,115.46.
The broad-based S&P 500 sank 3.3 per cent to 2,785.92, while the tech-rich Nasdaq Composite Index dropped 3.1 per cent to 8,131.61.
While stocks rallied yesterday, equities have been on a broad downward trend for the last three weeks or so as the coronavirus has morphed from a China-centered problem to a global worry, threatening the 11-year US “bull” market for stocks.
Fresh news on the coronavirus front included the postponement of the giant Coachella music festival in California and a decision by the Bank of England to enact an emergency interest rate cut.
German Chancellor Angela Merkel cited forecasts that some two-thirds of the country could contract the virus, while US lawmakers and President Donald Trump’s administration were engaged in back-and-forth on possible stimulus measures for the US economy.
US Treasury Secretary Steven Mnuchin told a congressional panel the administration was “working full time” on a package, although there were indications that an idea to cut payroll taxes faced opposition on Capitol Hill.
Goldman Sachs again slashed its 2020 earnings forecasts, saying in a note both the real economy and financial economy were showing “acute signs of stress” as travel slows to a trickle and the oil industry reels in the face of lower prices.
Travel-linked stocks remained an especially ugly sector, with Marriott International down 7.3 per cent, United Airlines 6.8 per cent and Expedia 5.7 per cent.
Petroleum-linked shares were also weak, with Devon Energy losing 6.4 per cent and Halliburton 8.1 per cent as a US oil inventory report showed higher supplies. — AFP