By Noah Manskar and Thornton McEnery, NY POST
US stocks continued to plunge Monday after a brief trading halt, with the Dow off more than 2,000 points as an oil-price war roiled global markets already panicked by the coronavirus epidemic.
The S&P 500 index sank 7 percent after the opening bell, triggering the first of three New York Stock Exchange “circuit breakers” that halted trading for 15 minutes at 9:35 a.m. The index pared the losses after trading reopened to 5.9 percent as of 9:58 a.m., but was on track for its worst single-day drop since the financial crisis.
The nascent oil conflict between the Saudis and Russia gave investors a second crisis to grapple with on top of the coronavirus fears that dominated last week’s volatile trading.
“The oil price collapse adds a new dimension for fear and uncertainty,” said David Bahnsen, chief investment officer at the Bahnsen Group. “This is very, very, very bad,” one macro trader told The Post. “When two crises collide into each other, it’s never good.”
The Dow suffered its worst-ever intraday decline after trading resumed, sinking as much as 2,046.08 points, or 7.9 percent, to 23,818.68. And the Nasdaq composite plunged as much as 7.2 percent to a low of 7,957.93.
Oil prices were down as much as 30 percent on Sunday after Russia rejected a proposal from OPEC to cut back on global oil production by as much as 1.5 million barrels a day. That vote was seen as an economic attack on Saudi Arabia, which retaliated by increasing its own production causing the price of oil to nosedive.
US shale producers suffered as a result, with shares in Diamondback Energy tanking as much as 51.8 percent and Whiting Petroleum stock plunging as much as 44.4 percent.
Coronavirus fears have already had a massively negative impact on global travel, which also impact oil prices. Experts predict that things are set to worsen for airlines, meaning that demand for oil should weaken, depressing prices even further. Low fuel prices aren’t likely to boost consumer spending, either, because of the coronavirus outbreak, analysts said.
“No one’s going out and going to spend a day at the mall and shop at Forever 21 right now,” said Anthony Denier, CEO of the trading platform Webull. “The positive effects of a lower energy environment is not going to happen here and, in fact, it’s going to be the opposite.”
All three stock indices pared their gains through the morning, which observers said indicated traders were picking up cheap stocks on the way down. The Dow was down 6.1 percent at 24,287.42 as of 1:01 p.m., while the S&P and the Nasdaq were recently off 5.7 and 4.9 percent, respectively.
“The trading halt maybe gave people a chance to (let) cooler heads prevail,” said Donald Selkin, chief market strategist at Newbridge Securities.
But finance sources weren’t ruling out the possibility of the S&P tripping the second circuit breaker, which would halt trading for another 15 minutes if the index fell 13 percent from Friday’s close. Trading would stop for the day if the S&P were to drop 20 percent.
“Based on sentiment, I haven’t spoken to a single client that had confidence in the government’s ability to prevent the spread of this virus or pull the right levers to save this market,” said Isaac Boltansky, director of policy research at Compass Point Research & Trading.
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