Dow and US stocks plunge again: March 16, 2020

By CNN Business

Updated 9:54 a.m. ET, March 17, 2020
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1:59 p.m. ET, March 16, 2020

Stocks are on track for their worst month since 1987

From CNN Business' Anneken Tappe

There's no way to sugarcoat this: The markets look terrible right now.

We're halfway through March and Wall Street is on track for its worst month in more than three decades.

The S&P 500, the broadest measure of American stocks, is down 16.9% so far this month -- putting it on track for its worst month since October 1987, when the infamous "Black Monday" market crash happened.

Ouch.

1:43 p.m. ET, March 16, 2020

US Chamber of Commerce calls for support so businesses can keep going

From CNN Business' Anneken Tappe

America's Chamber of Commerce today called for measures to support US businesses of all sizes to ensure they can weather the storm of the coronavirus fallout.

Though pleased with what Congress has done so far, more action is needed, said Tom Donohue, CEO of the chamber, in a statement.

"No business or family should go bankrupt from the temporary but significant disruption caused by the Coronavirus,” Donohue added.

The chamber is calling for three measures:

  1. A cancellation of all payroll taxes paid by employers for the months of March, April and May, which would be a monthly relief of some $100 billion for companies and could give them breathing room to fund paychecks.
  2. Expanding and streamlining of loan programs for small businesses experiencing revenue loss as a result of the coronavirus outbreak.
  3. The creation of credit facilities to provide loans and loan guarantees to employers with more than 500 employees that have witnessed revenue losses.
2:29 p.m. ET, March 16, 2020

Proposal to give every American a check for $1,000 gains steam

From CNN's John Harwood and Betsy Klein

There are signs that a direct cash-to-citizens proposal is gaining traction.

Greg Mankiw, a former top economic adviser to President George W. Bush, has embraced the idea.

"I would start with a $1000 check for every American, sent out as quickly as possible," Mankiw told CNN's John Harwood. "That would work out to be about 1.7% of GDP. But if this pandemic continues, we might have to do it again in a month."

The proposal, which has been advocated by Obama adviser Jason Furman, would send $1,000 to every American immediately. Furman has estimated the proposal would cost $350 billion.

Republican Sen. Mitt Romney of Utah, who was advised by Mankiw in both of his presidential campaigns, has also voiced support for such a measure.

Although its chances of passing Congress and President Donald Trump's desk are unclear, Trump economic adviser Larry Kudlow would not rule the proposal out when asked by CNN.

12:26 p.m. ET, March 16, 2020

Stocks are off their lows at midday

From CNN Business' Anneken Tappe

While stocks remain squarely in the red at midday, the three major US indexes have bounced back from their session lows.

The S&P 500 is down 7.1%, while the Dow is 7.7%, or around 1,780 points. The Nasdaq Composite fell 7.1%.

Stocks tripped a circuit breaker this morning when the S&P dropped more than 7%. But a circuit breaker can only be triggered once, which is why the index can now fall below 7% without trading being halted again. The next circuit breaker is at a 13% drop on the S&P.

The S&P was down as much as 11.4% at its low point earlier. The Dow fell nearly 2,800 points at its worst.

"There has been indiscriminate selling," said Ralph Bassett, head of North American equities at Aberdeen Standard Investments, in emailed comments about today's market activity.

Still, Bassett is staying put:

"At this stage we’re making very few changes to portfolios," he said. "The focus is on looking at how the drivers of these businesses are going to be impacted, but importantly their ability to fund their operations during what will likely prove an acutely weak period of demand for most companies."

12:18 p.m. ET, March 16, 2020

Pump, pump pump: NY Fed offers to inject another $500 billion to calm jittery markets

From CNN Business' Matt Egan

The New York Federal Reserve is once again ramping up its cash injections aimed at easing stressed-out financial markets.

The NY Fed just announced it will conduct an additional overnight repo operation on Monday afternoon. The move will inject up to $500 billion into financial markets and be on top of previously scheduled operations.

The statement said the NY Fed is taking these steps to make sure the supply of reserves "remains ample" and to support the "smooth functioning" of short-term funding markets.

In other words, the Fed is trying to avoid a liquidity squeeze that sparks a financial crisis.

The US central bank is racing to calm investors freaked out by the severe disruptions caused by the coronavirus pandemic.

The Fed slashed interest rates by a full percentage point to zero Sunday evening and officially relaunched its 2008 financial crisis-era bond-buying program known as quantitative easing.

Last week, the NY Fed announced plans to inject $1.5 trillion into financial markets to smooth unusual disruptions in the Treasury market, where liquidity dried up during the market chaos.

10:53 a.m. ET, March 16, 2020

Corporate earnings are about to get extremely ugly

From CNN Business' Paul R. La Monica

Corporate profits rose ever so slightly in the fourth quarter of last year after three consecutive drops in the first part of 2019. Heading into 2020, analysts were optimistic that earnings would continue to rebound.

Then the coronavirus outbreak happened. And now, all bets are off.

The question on Wall Street is no longer about how much will profits increase this year but how bad will things get.

Analysts surveyed by FactSet are forecasting a 1.7% decline in earnings for the S&P 500 during the first quarter. But that forecast is almost certain to be overly conservative.

Read more about the expected downturn in company earnings here.

11:10 a.m. ET, March 16, 2020

Leadership change at Lockheed Martin

From CNN Business' Jackie Wattles

The United States' largest defense contractor announced its CEO of seven years, Marillyn Hewson, is stepping down.

Hewson will stay on as chairman of the board. Her replacement as CEO will be James Taiclet, who led wireless infrastructure developer American Tower Corporation since 2003.

The shift in leadership at Lockheed Martin (LMT) was planned, according to a statement from Hewson, who said she recommended Taiclet as her replacement.

I know it is the right time to transition the leadership of Lockheed Martin. The corporation is strong, as evidenced by our outstanding financial results last year and a record backlog of business

Her departure comes after Lockheed racked up a record backlog of orders in 2019. Much of the company's growth was driven by weapons and missile production, according to its latest earnings report.

10:37 a.m. ET, March 16, 2020

The Dow is at its lowest level in three years

From CNN Business' Anneken Tappe

It's an ugly day for stocks. After trading was halted for 15 minutes at the opening bell because of steep declines, the Dow has now fallen to its lowest level since May 2017.

The index was last down 9.5%, or around 2,200 points.

The selloff that has ravaged markets for weeks has dragged the Dow more than 26% lower this year alone. Mind you, the index hit its most recent record high on February 12, just more than four weeks ago.

11:17 a.m. ET, March 16, 2020

Nationwide US curfew is in discussion

From CNN's Barbara Starr and Betsy Klein

There is active discussions within the Trump administration to encourage a possible “curfew” across the nation in which non-essential businesses would have to close by a certain time each night, according to an administration official and another source familiar.  The guidance would likely focus on malls, restaurants and bars. Grocery stores and pharmacies could be exempt from the curfew. The idea would be fashioned after the European model but would likely have to be enforced at a local level.

The source familiar tells CNN that a curfew is likely to be strongly encouraged at the state level during the President’s video teleconference with governors today. 

The White House has not yet responded to CNN’s request for comment