NEW YORK — Stocks tumbled more than 5% on Wall Street Wednesday, and the Dow erased virtually all its gains since President Donald Trump’s 2017 inauguration. Even prices for investments seen as safe during downturns fell as the coronavirus outbreak chokes the economy and investors rush to raise cash.
Markets have been incredibly volatile for weeks as Wall Street and the White House acknowledge the rising likelihood that the pandemic will cause a recession. The typical day this month has seen the stock market swing up or down by 4.9%. Over the last decade, it was just 0.4%.
It was just a day before that the Dow surged more than 5% after Trump promised massive aid to the economy, but the number of infections keeps climbing, and the Dow erased all but 0.4% of its gain since Trump’s inauguration. The S&P 500, which dictates how 401(k) accounts perform much more than the Dow, is down 29.2% from its record set last month, though it’s still up 12.1% since Election Day 2016.
The S&P 500’s slide was so sharp that trading was halted for 15 minutes Wednesday. The index ended the day down 5.2% after earlier being down as much as 9.8%.
Delta Air Lines said Wednesday it’s parking at least half its planes to catch up with a plummeting drop in travel. Detroit’s big three automakers have agreed to close their North American factories to protect workers. And at the New York Stock Exchange, all trading will go electronic after the trading floor begins a temporary closure Monday.
As big swaths of the economy retrench while much of society comes to a halt in an attempt to slow the spread of the virus, investors have clamored for Congress, Federal Reserve and other authorities around the world to support the economy until it can begin to reopen.
They got a big shot of that Tuesday, when the Trump administration briefed lawmakers on a program that could surpass $1 trillion and the Fed announced its latest moves to support markets.
But the worldwide number of known infections has topped 200,000, which creates more uncertainty about how badly the economy is getting hit, how much profit companies will make and how many companies may go into bankruptcy due to a cash crunch.