COVID-19

Making sense of Monday’s market sell-off

Justin Ho Mar 10, 2020
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Traders work on the floor of the New York Stock Exchange on March 9, 2020 in New York City. Spencer Platt/Getty Images
COVID-19

Making sense of Monday’s market sell-off

Justin Ho Mar 10, 2020
Traders work on the floor of the New York Stock Exchange on March 9, 2020 in New York City. Spencer Platt/Getty Images
HTML EMBED:
COPY

The Dow Jones Industrial Average dropped 2,014 points Monday. That’s a 7.8% drop, the biggest since 2008. The S&P 500 fell 7.6%. Bond prices saw huge gains, with the 10-year yield dropping as low as 0.4% at one point.

The selling occurred across the board: big losses in tech stocks, financial stocks, consumer goods and services. Crude oil in New York dropped 20%, to around $31 a barrel on Monday.

COVID-19 is making demand for oil slow down. George Pearkes at Bespoke Investment Group says, at these prices, the cost of drilling in the U.S. might not be worth it. That means jobs are on the line.

“Manufacturing jobs related to everything from pipelines, to sand, to everything that needs to get done in the oil patch,” Pearkes said. “All the services jobs that go with it.”

The main market concern, though, is what happens if the outbreak, or restrictions involving the outbreak, bring economic activity to a crawl. Does the outbreak lead to fewer people eating at restaurants, going shopping or going to conferences, regardless of how cheap gas prices might be?

Monday happened to be the 11th anniversary of the bull market. If the S&P 500 falls an additional 1.4%, that bull run will have officially ended.

COVID-19 Economy FAQs

What are the details of President Joe Biden’s coronavirus relief plan?

The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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