March 12 (UPI) — The Dow Jones Industrial Average fell nearly 10 percent on Thursday, its worst day since the 1987 market crash, amid ongoing concerns about COVID-19 and the oil markets.
The Dow closed down 2,352.6 points, or 9.99 percent, the Nasdaq shed 9.43 percent and the S&P 500 ended the day down 9.51 percent and a rarely used mechanism on Wall Street kicked in Thursday for the second time this week early in the day.
After rarely being used during its first 31 years, a safety mechanism — to interrupt trading and prevent a market free-fall — automatically activated after U.S. indices sank to begin trading.
Thursday’s losses continued a cold streak for U.S. markets on Wall Street this week. The safety mechanism was installed in 1988 after the “Black Monday” crash that saw the Dow lose nearly a quarter of its value. It cuts power to market infrastructure for 15 minutes before allowing trades to resume.
The falls came several hours after President Donald Trump said Wednesday night the United States would ban entry to travelers from Europe for 30 days, in a bid to keep the virus from spreading. The move didn’t appear to calm nerves on Wall Street and was criticized by the European Union.
Adding to the concern, oil prices tumbled to near $33 a barrel. Rystad Energy said banned flights could lead to a drop in oil demand by 600,000 barrels.
United Airlines stock fell 24.85 percent, Delta slid 21.04 percent and American Airlines dropped 17.28 percent, fueled by the president’s travel ban.
“Temporarily shutting off travel from Europe is going to exacerbate the already-heavy impact of coronavirus on the travel industry and the 15.7 million Americans whose jobs depend on travel,” Roger Dow, president of the U.S. Travel Association, said in a statement.
“We have and will continue to engage Congress and the administration on policy steps that are necessary to ensure that travel employers — 83 percent of which are small businesses — can keep the lights on for their employees.”
The Federal Reserve said it will inject more than $1.5 trillion of temporary liquidity into the market on Thursday and Friday to prevent trading conditions from harming the economy.
“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the Fed said.
The European Central Bank said Thursday it will expand its assets purchase program by $135 billion to stimulate the economy, but opted not to cut interest rates, which many analysts expected it to do.
“The coronavirus is proving to be a significant shock to our economies,” Andrea Enria, chairwoman of the ECB supervisory board, said in a statement. “Banks need to be in a position to continue financing households and corporates experiencing temporary difficulties.”
The world’s top cryptocurrency, Bitcoin, also recorded significant losses Thursday, with its value dropping 15 percent in the first 20 minutes.