Fred Imbert, Thomas Franck
As of 7:58 a.m. ET, Dow Jones Industrial Average futures were down more than 500 points, implying an opening loss of more than 400 points. S&P 500 and Nasdaq 100 futures also fell.
“Markets are clearly in a state of panic and forced liquidations – but risks remain skewed to the upside and this should become much more apparent once some of the solvency issues are addressed,” Adam Crisafulli, founder of Vital Knowledge, said in a note.
Traders also looked ahead to the release of weekly jobless claims at 8:30 a.m. to assess some of the economic damage from the coronavirus on the U.S.
The moves followed yet another violent day on Wall Street on Wednesday as investors swung back to pessimism after Tuesday’s 6% bounce.
The Dow dropped 1,338.46 points, or 6.3%, on Wednesday and clinched its first close below 20,000 since February 2017. The Dow was down more than 2,300 points at the lows of the session. The S&P 500 dropped 5.2% to 2,398.10 and closed nearly 30% below a record set last month as both indexes sank further into bear markets.
On Wednesday evening, the European Central Bank (ECB) announced a new Pandemic Emergency Purchase Program that will deploy €750 billion ($819 billion) to purchase securities to help support the European economy. The central bank said purchases will be conducted until the end of 2020 and include a variety of assets including government debt.
The ECB’s action follows similar initiatives by the Federal Reserve, its U.S. counterpart. The Fed announced earlier this month plans to pump an additional $1 trillion into the U.S. economy through asset purchases and cut the federal funds rate to zero. The Fed also said Wednesday night it will create a backstop for prime money market funds.
All-electronic trading will begin on March 23 at the open, the exchange said.
Voicing investor fears about the virus, longtime hedge fund manager Bill Ackman joined CNBC on Wednesday to warn that the novel coronavirus will wreak destruction on financial markets and the U.S. economy without unprecedented action by the federal government.
Ackman and scores of other economists and investors worry that the virus, and efforts to prevent its spread, could undermine U.S. manufacturing, exports and ultimately U.S. GDP growth.
“We need to shut it down now... This is the only answer,” the billionaire investor said. “America will end as we know it. I’m sorry to say so, unless we take this option.”
Stocks moved off their lows toward the end of Wednesday’s session, however, after the Senate had enough votes to pass a bill expanding paid leave and unemployment benefits in response to the virus as part of what’s expected to be a whopping governmental response to avoid a downturn.
Senate Majority Leader Mitch McConnell said Wednesday he would vote for the plan despite what he called “real shortcomings.” With the urgent need to take action, “I do not believe we should let perfection be the enemy of something that will help even a subset of workers,” he said.
The White House is weighing a fiscal package of more than $1 trillion that includes direct payments to Americans and financial relief to small businesses and the airline industry.
Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for eight consecutive sessions.
—CNBC’s Eustance Huang and Christine Wang contributed to this report.