By The Washington Post · Thomas Heath, Taylor Telford · BUSINESS, PERSONAL-FINANCE
The Dow skidded 2,252 points for its worst finish since 1987.
The New York Fed on Thursday and Friday will pump $1.5 trillion into the short-term lending markets that banks use to lend to one another. The central bank also announced it will buy $60 billion worth of Treasury bonds for the next month (Friday through April 13) to help keep that market functioning appropriately. Earlier this week, investors reported problems trading in U.S. government bonds. These irregularities echoed the types of freezes seen during the 2008 financial crisis, and the Fed appeared to want to act quickly to stop them.
The frantic sell-off began shortly after the open, following President Donald Trump's announcement that he would restrict travel from Europe for 30 days to stem the spread of the coronavirus. The Dow plummeted nearly 1,700 points, but it was the Standard & Poor's 500 index's 7% slide that triggered the "circuit breaker" - a 15-minute break to stop the free-fall and give traders time to recalibrate. But the blue-chip index sank further, closing down nearly 10%. The S&P 500 was off 9.5%, and the tech-heavy Nasdaq down nearly 9.3%.
The New York Stock Exchange activated the rarely used lever as the coronavirus's accelerating spread and worsening economic outlook have rattled global markets for weeks. Futures markets tumbled overnight after Trump announced the travel ban - a move that blindsided European officials.
Thursday's dive follows the frenetic pace Wall Street has followed all week and comes a day after the Dow morphed into a bear market, reflecting a 20% fall from its all-time high. The S&P 500 triggered the first circuit breaker of the week Monday after falling 7% early into the session. By the end of day, it had shed 7.6% and the Dow had lost a stunning 2,014 points, or 7.8%. The markets bounced back Tuesday, posting across-the-board gains, only to recoil Wednesday after the World Health Organization declared the coronavirus a pandemic. The Dow cratered nearly 1,500 points to fall into a bear market, which marks a 20% drop its all-time high.