The Dow had its worst day since 1987 despite the Federal Reserve’s best efforts while the S&P 500 and Nasdaq followed it into a bear market today, plus more in today’s Closing Bell on Money & Markets.
The Top Story
In an attempt to halt the massive sell-off in U.S. equities, the Federal Reserve will add nearly $2 trillion into the financial system.
The central bank’s efforts include purchasing more securities — which had previously been confined to T-bills — and adding more than $500 billion through three-month and one-month repo operations.
However, the move did nothing to calm investor’s nerves as markets continued to plunge. Stocks rose shortly after the Fed announced its plan, but it was short-lived as stocks cratered again shortly after.
The Dow Jones Industrial Average fell 9.9%, its worst day since the 1987 stock market crash. The S&P 500 fell 9.5% and the Nasdaq Composite dropped nearly 9.4%. While the Dow entered a bear market Wednesday, the other two indexes followed suit Thursday — dropping 20% below their most recent highs.
Caution surrounding the coronavirus outbreak also led the NCAA to cancel its March Madness basketball tournaments. The NBA, MLB, NHL and MLS are all suspending their seasons, as well.
The benchmark 10-year Treasury yield did tick up to 0.87%.
Money & Markets: Closing Bell*
S&P 500: 2,480 (-9.5%)
DOW: 21,200 (-2352, -9.9%)
NASDAQ: 7,201 (-9.4%)
GOLD: $1,568.10 (-4.5%)
BITCOIN: $5,928.92 (-23.3%)
U.S. 10-YEAR YIELD: 0.87%
*- as of 4:18 p.m.
A Big Win
Your “be on the lookout” this morning included Boeing Co. (NYSE: BA) as Washington state officials mulled a move to stop tax breaks for the company. Shares of Boeing fell 18.1%.
CME Group Inc. (Nasdaq: CME) announced it was closing an office in London after an employee tested positive for the coronavirus. CME shares fell 11.5%.
Finally, Party City Holdco Inc. (NYSE: PRTY) shares fell 47.8% after the company reported a drop in same-store sales and weaker earnings.
M&A News
Spectrum Brands Holdings Inc. (NYSE: SPB) is acquiring global aquatics nutrition company Omega Sea. Terms of the deal were not disclosed.
Golden Nuggets
In addition to providing no relief for equities, the Fed’s decision to put more money in the system did nothing to help precious metals.
Gold futures were down 4.4% to $1,568.70 an ounce. Silver futures off 6.4% to $15.70 an ounce.
Palladium suffered a massive drop in its futures prices, falling 22.1% to $1,736.50 an ounce while platinum was down 11.7% to $766.20 an ounce.
Cannabis Corner
A medical marijuana legalization bill has cleared a Tennessee Senate committee by a vote of 6-3.
The bill would legalize the use of medical marijuana in the state, but it included an amendment that would only allow medical use if the federal government reclassified marijuana as a Schedule 2 substance.
A similar measure cleared a House subcommittee, but that bill has since stalled. The Senate bill now moves to the government operations committee.
Stock Market Update
In a sign that the coronavirus hasn’t hit the labor market just yet, unemployment claims fell for the second straight week.
According to the Department of Labor, the number of unemployment benefit applications dropped by 4,000 last week to a seasonally adjusted 211,000. That drop matches the decline from the previous week.
The national unemployment rate in February was at a 50-year low 3.5%, but that was before the coronavirus started its spread across the country.
Today’s Big Winners:
(as of 3:15 p.m. EDT)
Occidental Petroleum Corp. (NYSE: OXY) +3.5%
A.O. Smith Corp. (NYSE: AOS) +0.05%
Today’s Big Losers:
(as of 3:15 p.m. EDT)
Royal Caribbean Cruises Ltd. (NYSE: RCL) -29.7%
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) -29.7%
United Airlines Holdings Inc. (Nasdaq: UAL) -21.1%
Boeing Co. (NYSE: BA) -15.1%
IBM Corp. (NYSE: IBM) -12.6%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.
Don’t forget about “Marijuana Markets: a POTcast,” featuring the biggest cannabis news and investment notes from Banyan Hill’s Anthony Planas, here on Money & Markets each Saturday morning.