By Geoffrey Smith
Investing.com — U.S. stock markets fell further into bear market territory at the open on Thursday, after President Donald Trump failed late on Wednesday to provide a detailed package of economic policy stimulus to address the impact of the spreading coronavirus.
By 9:35 AM ET (1335 GMT), the was down 1,729 points or 7.3%. The S&P 500 was down 6.4% and the was down 6.5%.
“The market conclusion would appear to be that the U.S. President’s approach does not represent the clear and coherent economic plan that investors wish to see,” said Paul Donovan, chief economist with UBS Global Wealth Management, in a morning briefing.
Speaking after the market close on Wednesday, Trump had announced a somewhat haphazard cocktail of measures including a ban on foreign nationals arriving from continental Europe, but not from the U.K. and Ireland, a measure that dealt another blow to airline and travel-exposed stocks.
The news also sent oil prices spiralling lower again as markets priced in another big cut to fuel demand from the air and road transportation sectors.
In addition, Trump announced that the April 15 tax deadline would be deferred, giving an effective bridging loan of $200 billion to households and businesses struggling with short-term cash flow issues, but there was no mention of state-subsidized sick pay or of any expansion of testing for the disease within the U.S., despite increasing signs of the virus spreading within the community.
“The further characterization of this as a ‘foreign virus’ seems an unrealistic assessment of the domestic U.S. risks,” Donovan said.
The market was unmoved by the European Central Bank’s decision to increase its quantitative easing program and offer cheap targeted loans to banks for the next year. The ECB kept its key interest rates unchanged.
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