(Photo: New York Times)

Global stocks plunge with crude oil in free fall

(Photo: New York Times)

US stocks plunged more than five per cent, whipsawing back from losses that topped seven per cent and triggered a trading halt, as a full-blown crude price war rattled financial markets already on edge over the spreading coronavirus. Treasury yields plummeted; oil sank more than 30 per cent and credit markets buckled.

Gas flares burn from pipes aboard an offshore oil platform in the Persian Gulf’s Salman Oil Field near Lavan island, Iran, on Jan. 5. 2017.

The S&P 500 is now down about 18 per cent from its Feb. 19 all-time high, threatening to end the record-long bull market that began 11 years ago to the day. NYSE circuit breakers halted trading for 15 minutes at 9:34 a.m. in New York, in a move designed to limit panic. The next circuit breaker will trip if losses reach 13 per cent.

In a dramatic day across assets globally:

  • Crude tumbled the most since the Gulf War in 1991, after an OPEC+ alliance that had contained global production disintegrated. WTI and Brent pared some of their losses but remained down more than 20 per cent.
  • The 10-year Treasury yield fell below 0.5 per cent and the 30-year yield dropped under 0.9 per cent, taking the whole US yield curve below one per cent for the first time in history.
  • The Stoxx Europe 600 Index fell the most since 2016 on trading volumes exceeding three times the 100-day average. Several of the region’s gauges look set to enter bear markets. Japanese stocks entered one earlier when they tumbled almost six per cent.
  • A US derivatives index that measures the perceived risk of corporate credit surged by the most since Lehman Brothers collapsed.
  • Exchange rates including the yen saw sharp moves as traders struggled to establish where new ranges might be. The yen was up about three per cent versus the dollar while the euro and Swiss franc both strengthened more than one per cent.

These are the main moves in markets:

  • The S&P 500 Index sank 5.3 per cent to 2,815.33 as of 10:34 a.m. New York time, the lowest in about nine months on the largest tumble in more than eight years.
  • The Dow Jones Industrial Average sank 5.3 per cent to 24,485.76, the lowest in more than 13 months on the biggest tumble in more than eight years.
  • The Nasdaq Composite Index sank 5.1 per cent to 8,142.41, the lowest in almost 20 weeks on the largest tumble in more than eight years.
  • The MSCI All-Country World Index sank 5.1 per cent to 488.47, the lowest in more than 13 months on the biggest tumble in more than 11 years.