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A trader on the floor of the New York Stock Exchange on Tuesday © Reuters
Adam Samson and Philip Georgiadis in London, Hudson Lockett in Hong Kong, Leo Lewis in
Tokyo and Colby Smith in New York 12 HOURS AGO
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13/3/2020 (44) US stocks fall 10% in worst day since 1987 crash | Financial Times
US stocks fell almost 10 per cent in their worst day since the 1987 crash despite
emergency actions by the Federal Reserve and the European Central Bank to mute the
financial and economic damage from the coronavirus.
“This was the most expensive speech in history,” said Luca Paolini, chief strategist at
Pictet Asset Management. “Investors are voting with their feet, and I can’t blame
them.”
A further leg down in the final minutes on Wall Street left the S&P 500 off 9.5 per cent.
European equities had already shed a tenth of their value. London’s FTSE 100 fell 11
per cent. Thursday’s action extended the S&P 500’s losses to 26.7 per cent from its high
less than a month ago.
The Fed promised midway through the trading day that it would inject trillions of
dollars into the short-term funding markets — the third time in four days that it has
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13/3/2020 (44) US stocks fall 10% in worst day since 1987 crash | Financial Times
dollars into the short term funding markets the third time in four days that it has
announced new lending — after analysts and investors said US government bond
trading had begun to seize up in the market volatility.
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13/3/2020 (44) US stocks fall 10% in worst day since 1987 crash | Financial Times
Travel and leisure stocks came under acute pressure. The cruise ship operator Carnival
lost nearly a third of its value, while United Airlines fell 25 per cent and British Airways
owner IAG declined 11 per cent.
Giant banks were also hard hit. Morgan Stanley, Citigroup and Wells Fargo all lost
around 15 per cent of their value.
The corporate fallout of the viral outbreak has deepened. UK companies including
WHSmith, Go-Ahead and Travelex warned investors about the impact of the pandemic,
while Cineworld, the world’s second-biggest cinema chain, warned that, in a worst-case
scenario, it would be unable to pay its debts, calling into question its ability to continue
trading.
Alicia Levine, chief market strategist for BNY Mellon Investment Management, warned
that the credit market could face a further shock if investment grade companies are re-
rated as junk, forcing large investors like pensions to sell their bonds. “This will create
forced selling, exacerbating the impact to the economy.”
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13/3/2020 (44) US stocks fall 10% in worst day since 1987 crash | Financial Times
o ced se g, e ace bat g t e pact to t e eco o y.
Oil prices, which crashed at the start of this week, fell on the expectation the US travel
ban would cause more pain for the travel industry. The international benchmark Brent
crude was down 7.2 per cent at $33.22 a barrel.
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