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Dow Plummets Despite Rate Cut

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Dow Plummets Despite Rate Cut

Stocks fell in volatile trading on Tuesday after the Federal Reserve slashed interest rates by half a percentage point in an emergency effort to stem slower economic growth from the coronavirus outbreak.

The Dow Jones Industrials stumbled 352.4 points, or 1.3% to break for noon at 26,350.92. The 30-stock average gyrated between sharp gains and solid losses after the decision was announced.

The broader S&P 500 dropped 37.03 points, or 1.2%, to 3,053.20.

The tech-heavy NASDAQ let go of 98.41 points, to 8,853.75.

Bank shares fell broadly, led by a 3% drop in Bank of America shares. JPMorgan Chase skidded 2.5% and Citigroup slid 0.4%.

The decision came two weeks before the Fed’s scheduled meeting as the central bank felt it was necessary to act quickly to combat the effect of the virus spreading worldwide. It’s the first such emergency action coming in between scheduled meetings since the financial crisis.

Investors have been fretting over a potential economic slowdown as the coronavirus spreads around the world. More than 89,000 coronavirus cases have been confirmed globally along with more than 3,000 deaths related to the virus.

Prices for the 10-Year U.S. Treasury gained sharply, dropping yields to 1.03% from Monday’s 1.15%. Treasury prices and yields move in opposite directions.

Oil prices gained 63 cents to $47.38 U.S. a barrel.

Gold prices $43.00 to $1,637.80 U.S. an ounce.

Copyright © 2020 Baystreet.ca Media Corp. All rights reserved.

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