Warning: file_exists(): File name is longer than the maximum allowed path length on this platform (260): C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br/wp-content/cache/supercache/www.forexbr.com.br/2020/03/17/market-snapshot-dow-tumbles-more-than-1300-points-amid-questions-whether-government-action-on-coronavirus-is-sufficient/meta-wp-cache-d272ecd2faba3b77ddc956e7f52d2eda.php in C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br\wp-content\plugins\wp-super-cache\wp-cache-phase2.php on line 71 Market Snapshot: Dow tumbles more than 1,300 points amid questions whether government action on coronavirus is sufficient – Forex Brasil

Market Snapshot: Dow tumbles more than 1,300 points amid questions whether government action on coronavirus is sufficient

U.S. stock-index futures pointed to another tumultuous session on Wednesday, falling their daily limit again as investors grapple with a flood of coronavirus-flighting plans from governments and debate whether the measures will be enough.

How are stocks performing?

Dow Jones Industrial Average futures YM00, -3.34% fell 821 points, or 3.9%, to 20,039, while S&P 500 futures ES00, -2.80% were of 92 points, or 3.7%, at 2,393.50. Nasdaq-100 futures NQ00, -2.17% dropped 328 points, or 4.4%, to 7,064.25. Stock-index futures price limits prevent contracts from trading 5% above or below a fixing price set in the final 30 seconds of regular trading in the previous session.

When futures are locked at their daily limit, traders look at index-based exchange-traded funds for clues on where markets might trade. The SPDR S&P 500 ETF Trust SPY, -3.08% was down 6.5% in premarket trade. When regular trading opens, stocks are subject to circuit breakers in the event of large declines. A fall of 7% for the S&P 50 would trigger an initial circuit breaker, halting marketwide trade for 15 minutes.

The Dow DJIA, -3.93% on Tuesday rose 1,048.79 points, or 5.2%, to 21,237.31, after briefly dipping below the psychoogically important 20,000 threshold midmorning. while the S&P 500 index SPX, -3.29% added 143.06 points, or 6%, to close at 2,529.19. The Nasdaq Composite Index COMP, -2.32% closed up 430.19 points or 6.2%, at 7,334.78.

The Dow is off 28% from its Feb 12 record closing high, while the S&P 500 and Nasdaq are off by about 25% and 26%, respectively, from their Feb. 19 peaks.

What’s driving the market?

Stock-index futures headed south, indicating Tuesday’s rebound may prove unsustainable, on worries the countries affected by the coronavirus are headed for a prolonged lockdown, said Raffi Boyadjian, market analyst at XM, in a note.

“Such a scenario would have been unthinkable just a couple of weeks ago but is fast becoming the new reality, meaning economic activity around the world could soon be coming to a standstill, with devastating consequences for corporate cash flow,” Boyadjian said.

Tuesday’s bounce came a day after the Dow Jones Industrial Average suffered its worst one day fall since the 1987 market crash as governments in the U.S. and Europe shut down significant amounts of economic activity in an attempt to slow the pandemic that originated in China late last year.

Stocks were buoyed as the Trump administration signaled support for a stimulus package of $1 trillion or more, including direct payments to individuals and rescue packages for industries. The Federal Reserve, after moving to slash rates to nearly zero on Sunday and taking additional stimulus measures, on Tuesday unveiled a commercial paper facility aimed at providing a liquidity backstop to the market. Later in the day it also unveiled a Primary Dealer Credit Facility.

The actions were seen as a response to pressures in the funding market amid rising demand for short-term cash from companies dealing with the slowdown caused by the outbreak.

The economic calendar features February housing starts and building permits at 8:30 a.m. Eastern.