US stock indexes dropped sharply on Wednesday after attempting a rebound in the previous session, on skepticism around President Donald Trump's stimulus plan to combat the coronavirus outbreak.
The benchmark S&P 500 index was 17.6 per cent below its all-time peak hit on Feb. 19. If it closes 20 per cent below its record closing high from just three weeks ago, the index would confirm a bear market.
Expectations that Trump would announce "major" stimulus measures helped Wall Street claw back losses on Tuesday from a bruising sell-off at the start of the week on the back of a collapse in oil prices.
Trump met with fellow Republicans in the US Senate on Tuesday and discussed a payroll tax cut, but no concrete measures have been announced.
"This has to be a co-ordinated effort," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
"The President cannot unilaterally take action. He needs Congress, which is the financing arm of the government."
The rapid spread of the virus has galvanized central banks and governments to roll out measures to cushion its fallout. The Bank of England became the latest central bank to cut interest rates.
The US Federal Reserve is expected to cut rates for the second time this month when it meets next week, pressuring Treasury yields further.
Rate-sensitive U.S. lenders tumbled, with the banks index down 3.4 per cent. The energy sector dropped about 4 per cent while all major S&P sectors were down at least 2.1 per cent.
At 9:47 a.m. ET, the Dow Jones Industrial Average was down 785.32 points, or 3.14 per cent, at 24,232.84 and the S&P 500 was down 85.23 points, or 2.96 per cent, at 2,797.00. The Nasdaq Composite was down 218.11 points, or 2.61 per cent, at 8,126.15.
Nike Inc fell 5.1 per cent, the most among the blue-chip Dow Industrials components, after rivals Adidas and Puma flagged a sales hit in China due to the outbreak.
In a bright spot, DXC Technology Co rose 3.7 per cent after the IT and consulting services provider said it would sell its healthcare technology business to private equity firm Veritas Capital for $5 billion.
Declining issues outnumbered advancers for a 11.03-to-1 ratio on the NYSE and a 6.23-to-1 ratio on the Nasdaq. The S&P index recorded no new 52-week highs and 18 new lows, while the Nasdaq recorded three new highs and 174 new lows.
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