NEW YORK • Trading on Wall Street was temporarily halted early yesterday as US stocks joined a global rout on crashing oil prices and worries over the coronavirus.
The 15-minute suspension was triggered after the S&P 500's losses hit 7 per cent, falling to 2,764.21 as of 9.34am in New York.
The gauge extended the losses to 7.2 per cent when trading resumed at 9.49am.
The last time stocks triggered the 7 per cent circuit breaker, on Dec 1, 2008, the S&P 500 index ended the day down 8.9 per cent.
"Even though people are concerned it could create more problems, it does allow people to step back and reassess what they're doing," said Mr Matt Maley, an equity strategist at Miller Tabak & Co. "It's been a long time since any of these circuit breakers kicked in. Back then, it was positive. It allowed people to calm down a little bit."
Another 15-minute pause will happen if losses reach 13 per cent. If the decline hits 20 per cent, markets will close for the day.
This comes as the benchmark Dow Jones Industrial Average crashed 2,000 points, or about 6.9 per cent, in what would be its biggest one-day fall ever, as trading resumed yesterday following a 22 per cent slump in oil prices.
Saudi Arabia's move to raise oil production significantly after the Organisation of the Petroleum Exporting Countries' supply cut agreement with Russia collapsed sent ripples across global financial markets already panicking about the impact of the coronavirus outbreak.
Crude oil logged its worst day in almost three decades, sending oil majors Chevron Corp and Exxon Mobil Corp down more than 7 per cent.
The S&P index recorded 211 new lows, while the Nasdaq recorded 867 new lows.
The virus continued to prompt major economic dislocations, as Italy imposed a month-long lockdown on the country's northern region and major sporting events were cancelled, along with concerts and industry conferences.
The International Monetary Fund called for "substantial" stimulus and international coordination to counteract the economic impact of the spreading coronavirus epidemic, while the New York Federal Reserve Bank announced that it will increase its daily injections of cash into financial markets by US$50 billion (S$69.1 billion) to US$150 billion to boost market liquidity.
The International Energy Agency said yesterday that global oil demand is set to contract this year, for the first time in over a decade.
The energy watchdog said it expected oil demand to be 99.9 million barrels per day (bpd) this year, lowering its annual forecast by almost one million bpd and signalling a contraction of 90,000 bpd, the first time demand will have fallen since 2009.
AGENCE FRANCE-PRESSE, REUTERS, BLOOMBERG
