Wall Street plunges after oil shock, trading halts then resumes

Fear gripped financial markets around the world March 9 as stock prices and bond yields plunge on worries about the effects of a new coronavirus.

The most violent drops came from the oil markets, where prices cratered more than 20 percent. But moves in stocks and bond yields were nearly as breathtaking. In the United States, the S&P 500 plunged 7 percent in the first few minutes of trading, and losses were so sharp that trading was halted.

The Dow Jones Industrial Average lost 1,582 points, or 6.1 percent, after briefly being down more than 2,000. The S&P 500 lost 5.8 percent and the Nasdaq gave up 5.5 percent.

Trading in Wall Street futures was halted for this first time since the 2016 U.S. presidential election after they fell more than the daily limit of 5 percent. Bond yields hit new lows as investors bought them up as safe havens.

European stocks dropped more than 8 percent. Treasury yields careened to more record lows as investors dove into anything that seems safe, even if it pays closer to nothing each day. The main stock indexes in Britain and Germany were down by almost 7 percent. Japan's benchmark closed down 5.1 percent while Australia lost 7.3 percent and the Shanghai market in China was off 3 percent.

London's FTSE 100 tumbled 6.6 percent to 6,034 after opening down by more than 8 percent. Frankfurt's DAX shed 6.9 percent to 10,743 and the CAC 40 in France lost 6.9 percent as well, to 4,793. Italy's FTSE MIB plunged 10 percent to 18,713.

All the selling is the result of fear of the unknown. As COVID-19 spreads around the world, many investors feel helpless in trying to estimate how much it will hurt the economy and corporate profits, and the easiest response to such uncertainty may be to get out.

After...