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For the second time in less than week, the New York Stock Exchange’s “circuit breaker” kicked in as the market plunged over concerns about the coronavirus and the government’s slow response.
Trading was stopped for 15 minutes after the S&P 500 plunged 7% in the beginning of the trading day Thursday, triggering the system’s automatic circuit breaker, a leveled system meant to prevent a market crash. The Dow Jones Industrial Average was losing over 1,600 points as of publication.
The halt to NYSE trading is the second in just four days, following Monday’s brief stop after the Dow’s losses hit 7%. Before that, the last circuit breaker was triggered over 20 years ago, when a trading was halted twice on October 27, 1997.
At the time, the automatic stop was tied to point drops in the Dow. Since then, the threshold has been changed multiple times, most recently after a “flash crash” in May 2010 which caused a 9% drop in the Dow but didn’t trigger an automatic stop because the automatic trigger point was a 10% drop in the Dow.
The latest stock market plunge comes after President Donald Trump’s announcement in an Oval Office address to the nation Wednesday night that his administration is banning travel from Europe for 30 days beginning Friday, calling the coronavirus a “foreign virus.”
“The crux of the angst investors are feeling as the coronavirus spreads surrounds what might happen to consumer spending,” Scott Wren, a senior global market strategist at the Wells Fargo Investment Institute, told CNBC.
Global stock markets also fell sharply on Thursday following Trump’s speech. Both the FTSE in London and the DAX in Berlin were hovering around 8% losses on Thursday morning, as the three major American indexes — the Dow, S&P 500, and NASDAQ — were all roughly losing around 7%.
Cover: Specialist John O'Hara, center, works on the floor of the New York Stock Exchange, Wednesday, March 11, 2020. (AP Photo/Richard Drew)