Fred Imbert,Thomas Franck
As of 7:33 a.m. ET, Dow Jones Industrial Average futures dropped more than 600 points. S&P 500 futures were off by about 3.3%. Nasdaq 100 futures declined by 2.6%. The SPDR S&P 500 ETF was off by 3% in premarket trading.
Futures were well off their worst levels of the overnight session: Earlier, futures hit their "limit down" levels, falling 5%. Downside limits to futures contracts are implemented to ensure orderly market behavior once trading hits a certain threshold. No trades below that level are allowed.
A fiscal stimulus bill failed a key procedural Senate vote Sunday as Democrats warned the measure did not do enough to help impacted workers and instead offered too much for company
On a positive note, Senate Minority Leader Chuck Schumer, D-NY, said disagreements over the bill could be overcome in the next 24 hours. A spokesman for Schumer later added the senator and Treasury Secretary Steven Mnuchin had a "productive meeting."
Traders were waiting for any signs of a compromise as negotiations continued into the night.
"When this started, this was a bit unique to the airline industry since we had shut down most of airline travel," Mnuchin said. "This liquidity facility is a broad-based liquidity facility working with the Fed."
Boeing shares rose 1% in premarket trading, outperforming the market, as Goldman Sachs made a bold call Sunday evening, telling clients the company had enough cash to survive the
David Kostin, chief U.S.
"If short-term shutdowns lead to business defaults, closures, and permanent layoffs, the damage to corporate earnings growth could persist well after the virus is contained," Kostin said in a note.
In the U.S., more than 30,000 cases have now been confirmed. New York Gov. Andrew Cuomo said Sunday cases in the state soared to 15,168 over the weekend, more than the total number of cases in France or South Korea.
Economists at Goldman Sachs wrote Friday they expect a 24% contraction for the second quarter after a 6% drop in the first quarter. Morgan Stanley economist Ellen Zentner said in a note Sunday she expects a historic 30% contraction in the second quarter.
"Suffice to say that the economy entered a unique, sudden-stop recession in March," wrote Prajakta Bhide, strategist at MRB Partners. "If there is no concrete evidence of meaningful progress toward controlling the epidemic in the next eight weeks, there will be no basis for people and businesses to feel safe to begin to normalize economic activity."
The outbreak has led the New York Stock Exchange to close its trading floor and temporarily move to all-electronic trading beginning Monday. NYSE expects trading to proceed as normal.
"Things will get worse before they get better and the markets will continue to reflect that reality," said Marc Chaikin, CEO of Chaikin Analytics, in a note. "This means that a bottoming process will take more time and probably inflict more damage to equities."
Last week, stocks suffered their biggest one-week decline since the financial crisis in 2008, with the S&P 500 dropping more than 13%. Those losses put the broad market average more than 32% below its record set on Feb. 19.
Investors have also been rattled by a sharp decline in crude prices. West Texas Intermediate futures fell 29.3% last week, their biggest weekly fall since January 1991. U.S.
The steep losses in crude are forcing investors to sell other assets such as stocks or bonds to cover the losses in their energy positions. Crude futures briefly fell more than 8% Sunday night before clawing back most of those losses.