Stock Market Tumbles, Trading Briefly Halts
RACHEL MARTIN, HOST:
Stocks fell deeper into the red this morning as investors tried to grapple with the economic cost of the coronavirus pandemic. Trading was briefly halted just minutes after the opening bell, when the S&P 500 index plunged by seven percent. Last night, President Trump announced new measures to try to contain the virus and shore up the economy.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: After consulting with our top government health professionals, I have decided to take several strong but necessary actions to protect the health and well-being of all Americans.
MARTIN: But as evidenced by the news today from Wall Street, financial markets were not reassured. We've got NPR's chief economics correspondent Scott Horsley with us this morning. Hi, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Rachel.
MARTIN: We have seen another big sell-off in the first 90 minutes of trading on the stock market. What's going on?
HORSLEY: Right. Investors were poised to dump stocks just as soon as the market opened this morning. And very quickly, the S&P 500 index fell 7%. That's the trigger for a 15-minute halt to trading. We saw one of those earlier this week. And so trading was suspended for 15 minutes. When it restarted, stocks did stabilize a little bit. Right now the S&P is still down right around 7%. The Dow Jones Industrial Average - just checking my screen - is down about 8% as of this moment. So we're not seeing the really rapid decline. But remember, it was just yesterday that the Dow crossed into bear market territory for the first time in 11 years.
MARTIN: Right. So the travel industry is obviously going to take a hit because of an announcement that President Trump made last night - new limits on people traveling to the United States from some parts of Europe. The president, in his Oval Office address, seemed to blame European policy, in part at least, for the coronavirus cases here. Let's listen.
(SOUNDBITE OF ARCHIVED RECORDING)
TRUMP: The European Union failed to take the same precautions and restrict travel from China and other hot spots. As a result, a large number of new clusters in the United States were seeded by travelers from Europe.
MARTIN: We should just note, there is no evidence to support that. We don't have a clear understanding of how many cases here in the United States were caused by Europeans coming to this country. We also need to note that there was a lot of confusion about the president's remarks in general. I mean, he said that these restrictions would include goods - they do not. He also said all of Europe would face travel bans - that is not true. Can you explain, though, Scott, the real restrictions and what they could mean for the economy?
HORSLEY: Well, the real restrictions apply to travelers from continental Europe, so not the U.K. They're excluded from the U.S. for 30 days, but this doesn't apply to U.S. citizens or their immediate family members or green card holders. This was rolled out pretty abruptly. There was apparently no warning to the Europeans, and so that just added to the confusion, and the White House has had to do some cleanup on that.
This restriction will surely be another hit for airlines, hotels, tourist attractions, which have already been hurting during the coronavirus outbreak. European visitors account for about 30% of international travelers to the U.S. at this time of year, and of course, the industry was already suffering from the loss of visitors from China.
Now, on top of that, for domestic consumers, you have a lot of entertainment, sporting events, big gatherings of all kinds that have been canceled or postpone. Obviously, a highlight, NBA - or lowlight; the NBA announcing last night that it's suspending its season. That means less going out to bars and restaurants, less spending money. Might be a silver lining for Netflix and Amazon, but it's a hit for the broader economy. And, you know, hospitality has been a really strong sector, adding tens of thousands of jobs in recent months. This could really change that around.
MARTIN: So the White House has outlined this plan to help the economy, but yet it still doesn't seem to be helping the stock market. Can you explain what the plan is and why it's not helping on that?
HORSLEY: Yeah. And that's a contrast to what happened earlier this week when the market really rallied on a promise of a rescue package from the White House. But when investors actually saw what the president is offering last night, they were clearly disappointed - too little, too late and too little detail. He's talking about low-interest loans for affected businesses, maybe postponing next month's tax deadline - most importantly, perhaps, help for workers who don't have sick leave and are forced to stay home so they don't miss a paycheck. But again, we're waiting to see the details of how that might be accomplished.
MARTIN: And we should say, House Democrats plan to put out their own plan on the floor later today. Scott Horsley, NPR's chief economics correspondent. Thanks, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.