US Market tumbles after Senate fails again to push coronavirus bill

The US equity market finished session lower on Monday, 23 March 2020, as risk aversion selloff continued after the Senate failed for a second time to vote through the coronavirus economic relief package. Also, selloff fueled on unprecedented moves by the U.S. Federal Reserve to shore up credit across the economy proved insufficient to sooth investors' fears about the swiftly-spreading coronavirus. At closing bell, the Dow Jones Industrial Average tumbled 582.07 points, or 3.04%, at 18,591.93. The S&P 500 retreated 67.52 points or 2.93%, to 2,237.40.The Nasdaq Composite Index dropped 18.84 points, or 0.27% to 6,860.67.

Risk off selloff triggered after Senate Democrats blocked a coronavirus economic stimulus bill from advancing. Investors are increasingly concerned about the enormous stimulus bill that aims to respond to the flood of layoffs affecting millions of Americans and the economic pillage felt by businesses in nearly every sector. It was the second time in two days Democrats blocked the measure as talks over the giant bill continue.

The bill would steer payments of $1,200 to most adults and include $500 for each child. It would also allocate $350 billion to small businesses to address layoffs and send billions more to hospitals and the unemployment insurance system. The measure also would create a $500 billion program for businesses, states and localities.

However, market losses capped after the Fed said it would purchase Treasurys and mortgage-backed securities in the amounts needed to support smooth market functioning, showing the central bank is willing to go far beyond the $700 billion in new purchases announced last week.

The global economy is on track for a short but sharp recession this year, according to a statement from the International Monetary Fund, as the impact from the coronavirus pandemic weighs on economies throughout the world.

Goldman Sachs expects an outright contraction in global real gross domestic product in 2020 on the back of a 24% plunge in U.S. real GDP in the second quarter: 2-1/2 times as large as the previous postwar record.

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