Coronavirus, oil collapse erase $5 trillion from U.S. stocks

Coronavirus, oil collapse erase $5 trillion from U.S. stocks

Reuters  | Mar 09, 2020 20:53

Coronavirus, oil collapse erase $5 trillion from U.S. stocks

By Noel Randewich

SAN FRANCISCO (Reuters) - Fears about the rapidly spreading coronavirus and its impact on the global economy, which deepened on Monday with the collapse of oil prices, have evaporated over $5 trillion (3.81 trillion pounds) of the S&P 500's market value in recent weeks.

The U.S. stock benchmark's (SPX) 7.6% drop on Monday, which triggered a temporary trading halt in its biggest one-day decline since 2011, came after Saudi Arabia and Russia began a price war that threatens to overwhelm global oil markets with supply, causing crude prices to tumble 20% in their deepest daily rout since the 1991 Gulf War.

That price war broke out after major oil producing countries failed to reach an agreement to cut output to make up for lower demand related to the coronavirus.

"It's a perfect storm. You've got a lot of uncertainty in terms of how far the virus will spread in the U.S. You layer onto this the oil price cut. The third thing is financial instability, in the sense that with yields falling as far and as fast as they're falling," said Chris Zaccarelli, chief investment officer at Independent Advisors Alliance.

(GRAPHIC: S&P 500 market cap losses - https://fingfx.thomsonreuters.com/gfx/mkt/13/3091/3056/SPX%20500%20market%20cap%20loss.jpg)

On the New York Stock Exchange, the number of shares hitting 52-week lows reached more than 3,500 on Monday, the biggest number of new lows since 2008.

(GRAPHIC: NYSE new lows hit financial crisis levels - https://fingfx.thomsonreuters.com/gfx/mkt/13/3090/3055/NYSE%20new%20lows.jpg)

Since hitting a record high on S&P 500, the index has lost over $5 trillion in value. The S&P 500's largest 10 companies by market capitalization have seen their combined values drop by more than $1.4 trillion.

(GRAPHIC: Heavyweight losses - https://fingfx.thomsonreuters.com/gfx/mkt/13/3096/3061/Heavyweight%20losses%20.jpg)

About $250 billion has been erased from the stock market value of Microsoft (O:MSFT) since Feb. 19, more than any other U.S. company. Apple (O:AAPL) and Alphabet (O:GOOGL) have seen their values shrink by over $200 billion each, while Amazon (O:AMZN) has lost $170 billion in market capitalization.

The S&P 500 energy (SPNY) index on Monday plunged 20% to its lowest level since August 2004 as investors reacted to the slump in oil prices. [O/R]

That left the energy index down 50% from its 52-week high, far worse than any other sector. With the yield on the 10-year U.S. Treasury (US10YT=RR) declining to another record low on Monday, the S&P 500 financials index (SPSY) tumbled 11%, leaving it down 27% from its record high last month.

"The lower oil price is going to decimate oil stocks, the oil industry, the shale producers, and the record low interest rates are going to decimate the banks. Those are the stocks posting the biggest declines today," said Donald Selkin, chief marketing strategist at Newbridge Securities in New York.

(GRAPHIC: S&P 500 sector losses - https://fingfx.thomsonreuters.com/gfx/mkt/13/3092/3057/SPX%20500%20sectors.jpg)

Wall Street's meltdown has also hurt shares of companies that made highly anticipated debuts on Wall Street last year, adding to losses for companies including Peloton Interactive (O:PTON) and Uber Technologies (N:UBER) , while cutting into the gains of investor favorites, including Beyond Meat (O:BYND).

(GRAPHIC: IPO stocks take a hit - https://fingfx.thomsonreuters.com/gfx/mkt/13/3088/3053/IPO%20stocks.jpg)

© Reuters. A trader works on the floor of the New York Stock Exchange

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Anand Ranganadane
Anand Ranganadane

Peenuts  ... (Read More)

Mar 10, 2020 09:09 GMT· Reply
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.