Wall Street suspends trading as stocks drop by 8% on opening due to coronavirus

Stocks dropped 8% in the first minutes of trading Monday on Wall Street and triggered another temporary halt to trading as huge swaths of the economy come closer to shutting down, from airlines to restaurants. Emergency actions taken by the Federal Reserve late Sunday to prop up the economy and get financial markets running smoothly again may have raised fears even further, some investors said.

The selling was just as aggressive in markets around the world. European stocks and crude oil were both down close to 10%. The world’s brightest spot may have been Japan, where the central bank announced more stimulus for the economy, and stocks still lost 2.5%.

The spreading coronavirus is causing businesses around the world to shut their doors, which is draining away revenue. That has economists slashing their expectations for upcoming months, and JPMorgan Chase says the U.S. economy may shrink at a 2% annual rate this quarter and 3% in the April-through-June quarter. To many investors, that meets the definition of a recession.

Strategists at Goldman Sachs say the S&P 500 could drop as low as 2,000 in the middle of the year, which would be a 41% drop from its record set just a month ago, before rallying back to 3,200 at the end of the year.

The Federal Reserve has been trying to do what it can to help the economy, and over the weekend it slashed short-term interest rates back to their record low of nearly zero.

It also said it also will buy at least $500 billion of Treasury securities and $200 billion of mortgage-backed securities to help calm the Treasury market, which is a bedrock for the world’s financial system and influences stock and bond prices around the world. Trading in the market began to get snarled last week, with traders saying they saw disconcertingly large gaps in prices offered by buyers and sellers.

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