US stocks skid despite Fed's action to support markets
🕤 March 24, 2020 | 11:48 am
[Seoul: A currency trader walks by screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Tuesday, March 24, 2020. Asian stock markets gained Tuesday after the U.S. Federal Reserve promised support to the struggling economy as Congress delayed action on a $2 trillion coronavirus aid package. /PTI]
New York, March 24 : US stocks finished Monday's session significantly lower even after the Federal Reserve unveiled extensive new measures to support the economy amid the COVID-19 crisis.
The Dow Jones Industrial Average shed 582.05 points, or 3.04 per cent, to 18,591.93. The S&P 500 decreased 67.52 points, or 2.93 per cent, to 2,237.40. The Nasdaq Composite Index erased 18.84 points, or 0.27 per cent, to 6,860.67, Xinhua reported.
Shares of United Technologies plunged 9.18 per cent, leading the losses in the Dow. The index traded about 960 points lower at one point during the session. Boeing shares soared more than 11 per cent, the best-performing stock in the 30-stock index.
Ten of the 11 primary S&P 500 sectors ended lower, with energy down 6.65 per cent, the worst-performing group. Consumer discretionary rose 0.35 per cent, the only gainer among the groups.
The Federal Reserve announced earlier in the day that it will purchase US treasuries and agency mortgage-backed securities with no limit to help markets function more efficiently amid coronavirus uncertainty.
"The coronavirus pandemic is causing tremendous hardship across the United States and around the world," the Fed said in a statement on Monday morning.
"While great uncertainty remains, it has become clear that our economy will face severe disruptions. Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate," said the US central bank.
Earlier this month, the Fed made an unprecedented second emergency rate cut over just a two-week period, bringing the benchmark rate to near zero. It also launched a massive quantitative easing program, pledging to boost its bond holdings by at least $700 billion as a means to keep long rates down and provide liquidity into capital markets.
Wall Street finished the past week with massive losses as investors grappled with fears over potential economic damage by the coronavirus pandemic.
For the week ending March 20, the Dow shed 17.3 per cent, the S&P 500 fell 14.98 per cent and the Nasdaq lost 12.64 per cent. The major averages had their worst weekly performances since the global financial crisis in 2008.