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U.S. equity markets slid Monday after the Federal Reserve announced “extensive new measures” to support the U.S. economy.
The central bank said it would purchase Treasury securities and agency mortgage-backed securities in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
In addition, the Fed launched three new lending facilities which will provide up to $300 billion in new financing to support the flow of credit to employers, consumers and businesses.
FED TAKES MAJOR ACTION TO SUPPORT MARKETS AS CORONAVIRUS WEIGHS ON ECONOMY
The Dow Jones Industrial Average fell as many as 768 points, or 4 percent, while the S&P 500 and Nasdaq Composite lost 3.8 percent and 2.7 percent, respectively.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 18371.8 | -802.18 | -4.18% |
| SP500 | S&P 500 | 2210.15 | -94.77 | -4.11% |
| I:COMP | NASDAQ COMPOSITE INDEX | 6701.169786 | -178.35 | -2.59% |
The losses come after the Senate failed to advance a $1.4 trillion COVID-19 stimulus package on Sunday evening with Democrats saying the bill went too far in helping big corporations and didn’t go far enough in aiding individuals and health care providers. Another vote is expected on Monday.
Looking at stocks, airlines, cruise operators, casino operators and other travel-related names traded mixed after surging Friday in anticipation of a stimulus package.
Dow component Boeing was upgraded to “buy” at Goldman Sachs, which noted shares were attractive at these levels, down 80 percent from their 2019 highs.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAL | AMERICAN AIRLINES GROUP INC. | 10.19 | -0.20 | -1.88% |
| CCL | CARNIVAL CORP. | 11.04 | -0.96 | -8.00% |
| MGM | MGM RESORTS INTERNATIONAL | 9.29 | +0.18 | +1.96% |
| BKNG | BOOKING HOLDINGS INC. | 1,149.49 | -27.94 | -2.37% |
| BA | BOEING COMPANY | 95.86 | +0.85 | +0.89% |
Banks fell as heavy buying of U.S. Treasurys flattened the yield curve. The 2-year yield fell 10.4 basis points to 0.262 percent while the 10-year yield plunged 21.8 basis points to 0.72 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JP MORGAN CHASE & CO. | 78.74 | -4.76 | -5.70% |
| BAC | BANK OF AMERICA CORP. | 18.29 | -1.38 | -7.02% |
| WFC | WELLS FARGO & COMPANY | 25.43 | -1.07 | -4.04% |
Elsewhere, oil giant Shell halted its $25 billion share buyback program and said it was cutting spending by 20 percent to $20 billion, giving shares a lift. Rivals Exxon Mobil and Chevron slid as West Texas Intermediate crude oil traded up by 3.6 percent at $23.45 a barrel.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RDS.B | ROYAL DUTCH SHELL PLC | 24.64 | +0.68 | +2.84% |
| XOM | EXXON MOBIL CORPORATION | 30.80 | -1.95 | -5.94% |
| CVX | CHEVRON CORP. | 53.51 | -5.88 | -9.90% |
In Europe, markets were lower with Britain’s FTSE pacing the decline, down 3.8 percent, after the U.K. government warned of a possible lockdown to prevent the spread of COVID-19. Elsewhere in the region, Germany’s DAX and France’s CAC were off 2.6 percent and 3.3 percent, respectively.
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Asian market finished mixed with Japan’s Nikkei gaining 2.02 percent while China’s Shanghai Composite and Hong Kong’s Hang Seng tumbled 3.11 percent and 4.86 percent, respectively.
