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Stocks post worst day since 2008 as oil tanks 25%
09-Mar-20 16:10 ET

Dow -2013.70 at 23851.08, Nasdaq -624.94 at 7950.68, S&P -225.81 at 2746.56

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 dropped 7.6%, oil prices tanked 25%, and Treasury yields continued to fall to unprecedented levels on Monday after Saudi Arabia initiated a price war and coronavirus cases accelerated.

The Dow Jones Industrial Average (-7.8%) and Nasdaq Composite (-7.3%) performed comparably to the benchmark index, while the Russell 2000 (-9.4%) underperformed.

Saudi Arabia lowered its oil price for April delivery by $6-$8/bbl and signaled production boosts for an oversupplied market after Russia failed to agree to production cuts last Friday. WTI crude settled the session down 24.8%, or $10.23, to $31.09/bbl for its worst decline since 1991, which took a heavy toll on the S&P 500 energy sector (-20.1%).

The oil shock exacerbated recessionary concerns already fueled by the rapid spread of the coronavirus, as speculation arose about potential layoffs and defaults within the highly-leveraged energy space. The other ten S&P 500 sectors posted losses between 4.4% (consumer staples) and 10.9% (financials).

The financials space remained pressured by the sharp decline in Treasury yields, as investors continued to seek safety in bonds. The 2-yr yield fell 18 basis points to 0.32%, and the 10-yr yield fell 21 basis points to 0.50% after touching 0.34% at its low. The U.S. Dollar Index dropped 1.0% to 95.02.

Stocks were halted from trading for 15 minutes in the opening minutes of action after the S&P 500's 7.0% decline triggered a circuit breaker. At that point, the S&P 500 was down 18.5% from its all-time high and later it nearly entered bear market territory, which is typically defined as a loss of at least 20% from a recent high.

Expectations for stimulus measures from central bankers and policymakers rose amid the market turmoil. The fed funds futures market is expecting the Fed to cut rates by at least 75 basis points at its policy meeting next week, while the possibility of tax relief was floated by Senate Republicans.

In corporate news, there was a sizable deal struck today. Aon (AON 178.92, -35.89, -16.7%) agreed to acquire Willis Towers Watson (WLTW 184.74, -14.97, -7.5%) in an all-stock transaction that values the combined company at about $80 billion.

Investors did not receive any economic data on Monday. Looking ahead, the NFIB Small Business Optimism Index for February will be released on Tuesday.

Nasdaq Composite -11.4% YTD
S&P 500 -15.0% YTD
Dow Jones Industrial Average -16.4% YTD
Russell 2000 -21.3% YTD


Market Snapshot
Dow 23851.08 -2013.70 (-7.79%)
Nasdaq 7950.68 -624.94 (-7.29%)
SP 500 2746.56 -225.81 (-7.60%)
10-yr Note +19/32 0.579

NYSE Adv 70 Dec 2832 Vol 2.1 bln
Nasdaq Adv 175 Dec 3127 Vol 4.5 bln


Industry Watch
Strong: none

Weak: Energy, Financials


Moving the Market
-- Stock market closes down more than 7%

-- S&P 500 triggers circuit breaker after falling 7.0% shortly after the open, temporarily halted for 15 minutes at NYSE

-- Saudi Arabia launches price war by cutting oil prices and signaling production boosts

-- Coronavirus cases climb in the U.S. and elsewhere

-- Treasury yields drop to unprecedented levels



Crude settles down 25%
09-Mar-20 15:25 ET

Dow -1794.40 at 24070.38, Nasdaq -532.74 at 8042.88, S&P -200.75 at 2771.62
[BRIEFING.COM] The S&P 500 is down 7.0% and continues to trade below the 2800 level.

One last look at the S&P 500 sectors shows energy (-19.3%) continued to lead the broad-based retreat with a steep 19% decline. The financials sector (-9.0%) follows suit, while the consumer staples sector (-4.6%) is down the least.

WTI crude settled the session down $10.23 (-24.8%) to $31.09/bbl for its worst decline since 1991. The last time crude traded at this level was in 2016.