Monday's Stock Market Close: US Equities Plunge, Dow Drops 2,000, In Market’s Worst Day Ever

U.S. stocks plummeted on Monday in a historic bloodbath as investors sold off equities in a frenzy following a shocking drop in oil prices and bond yields in tandem with escalating coronavirus fears.

The Dow Jones Industrial Average tanked 2,013.76 points to 23,851.02 while the S&P 500 plummeted 225.81 points to 2,746.56 and the Nasdaq Composite Index tumbled 624.94 points to 7,950.68.

Prior to Monday, the biggest one-day loss for the Dow was 1,191 points on Feb. 27.

Bank stocks suffered mightily – JPMorgan (JPM), Citigroup (C) and Bank of America (BAC) all skidded more than 12%.

Volume on the New York Stock Exchange totaled 7.3 billion shares with 75 issues advancing, 14 setting new highs, and 2,969 declining, with 1,615 setting new lows.

Active movers were led by Inovio Pharmaceuticals Inc. (INO), Bank of America (BAC) and General Electric Co. (GE).

West Texas intermediate crude oil futures have plunged more than 25% after Russia and Saudi Arabia failed to agree on output cuts. On Saturday, the kingdom unveiled huge discounts to its official selling prices for April delivery.

“We believe the OPEC and Russia oil price war unequivocally started this weekend when Saudi Arabia aggressively cut the relative price at which it sells its crude by the most in at least 20 years,” said Goldman Sachs analyst Damien Courvalin said in a note. “The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus.”

“Crude has become a bigger problem for markets than the coronavirus,” said Adam Crisafulli, founder of Vital Knowledge. “It will be virtually impossible for the [S&P 500] to sustainably bounce if Brent continues to crater.”

Chris Rupkey, MUFG Union Bank’s chief financial economist, said: “The idea that lower gasoline prices is going to put more cash in workers’ pockets and give consumer spending and the economy a boost doesn’t seem to cushion the blow for stock market investors. They want out. Big time. The sky is falling. Get out, get out while you can. Wall Street’s woes have to eventually hit Main Street’s economy hard.”

President Donald Trump blamed the media, Russia and Saudi Arabia “arguing over the price and flow of oil” for the stock plunge.

The yield on the 10-year Treasury plunged 29.32% to 0.499% while yield on the 30-year Treasury dropped 22.88% to 0.937%

At one point, the yield on the 10-year Treasury note sank below 0.4% for the first time in history.

The number of global coronavirus infections surpassed 109,000 with at least 3,801 deaths. In the U.S. with New York, California and Oregon all declaring a state of emergency, confirmed cases reached nearly 550, including 22 deaths. Italy placed its northern industrial heartland on virtual lockdown.

“A blend of shocks have sent the markets into a frenzy on what may only be described as ‘Black Monday,’" said Sebastien Clements, analyst at financial payments platform OFX. “A combination of a Russia vs. Saudi Arabia oil price war, a crash in equities, and escalations in coronavirus woes have created a killer cocktail to worsen last week’s hangover.”

“You just don’t know which way things are going to go, it makes it very hard to price anything right now,” said Sarah Hunter, chief economist for BIS Oxford Economics. “We’re seeing that in the market with the wild oscillations that are coming through.”

"Markets are completely out of luck because there is no good news coming from anywhere which can help the current sell-off," said Naeem Aslam, chief market analyst at AvaTrade. "A real panic mode is on and there is no place to hide for investors.”

Overnight in Asia, markets plunged. China’s Shanghai Composite dropped 3.01%, while Hong Kong’s Hang Seng fell 4.23%, and Japan’s Nikkei-225 tumbled 5.07%.

In Europe markets cratered as Britain’s FTSE-100 plunged 6.34%, France’s CAC-40 swooned 6.65% and Germany’s DAX tumbled 6.24%.

Crude oil futures dropped 25.07% at $30.93 per barrel, although Brent crude bounced back to edge up 0.29% at $34.46. Gold futures gained 0.16%.

The euro rose 1.56% at $1.1462 while the pound sterling gained 0.54% at $1.3117.