Stock futures point to another day of declines on Wall Street

A man wearing a mask walks by the New York Stock Exchange (NYSE) on March 17, 2020 at Wall Street in New York City.

Johannes Eisele | AFP | Getty Images

Futures contracts tied to the major U.S. stock indexes fell early Thursday morning, signaling another day of declines for Wall Street.

As of 2:07 a.m. ET, Dow Jones Industrial Average futures were 410 points lower, implying an opening drop of 306.92 points. S&P 500 and Nasdaq futures also pointed to lower opens for the two indexes, though futures contracts trading can change rapidly overnight.

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.

An eye-watering spike in Treasury yields has also kept investors anxious. The 10-year Treasury rate rose 22 basis points to 1.18% on Wednesday following a rise of more than 30 basis points on Tuesday as it rebounds from record lows.

Earlier in Wednesday evening, futures swung higher after the ECB announced a new Pandemic Emergency Purchase Programme 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 will ensure that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock,” the central bank said in a release. “This applies equally to families, firms, banks and governments. The Governing Council will do everything necessary within its mandate.”

The ECB’s action follows similar initiatives by the Fed, 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 spread of the coronavirus also led the New York Stock Exchange to on Wednesday announce that it will temporarily close its historic trading floor and move fully to electronic trading. The exchange said that two people tested positive for the disease at screenings it conducted this week.

All-electronic trading will begin on March 23 at the open, the exchange said.

Voicing investor fears about the virus, longtime hedge fund 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.

The Pershing Square executive called upon President Donald Trump to start a “Spring Break” U.S. for one month and suspend all interest, rent and tax payments for the duration.

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.

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