NEW YORK (dpa-AFX) – The spreading corona virus and a crash on the international oil markets caused the US stock market to collapse on Monday. The Dow Jones Industrial (Dow Jones 30 Industrial) recently lost almost eight percent to 23,821.65 points. It fell to its lowest level since the beginning of 2019. In the past two weeks, the Dow had already lost almost eleven percent, particularly due to the impending consequences of the corona virus for the economy.
The market-wide S&P 500 lost 7.6 percent to 2747.87 points. The technology-heavy NASDAQ 100 was down 6.3 percent to 7996.64 points. After panicky sales immediately after the start bell, stock trading was interrupted for 15 minutes. The price fluctuations were so great in the first minutes of trading that the exchange temporarily stopped trading.
In addition to the consequences of the corona virus for the global economy, a drop in oil prices was an additional burden. After failed negotiations by leading oil countries to cut production volumes, the oil market experienced the steepest price slump in almost 30 years. The negotiating partners of the Opec oil cartel and allied countries could not agree on a new agreement. Saudi Arabia now wants to increase oil production. “A price war among producers is now facing weak oil demand,” wrote asset manager DWS in a market comment.
The US energy sector’s shares then plummeted historically. Papers from industry giants such as Occidental Petroleum, Schlumberger and Halliburton have been down 30 to 40 percent to lows for many years. ExxonMobil and Chevron stocks in the leading Dow index lost 12 and 15.5 percent, respectively. ConocoPhillips dropped 27 percent.
Commodities expert Carsten Fritsch from Commerzbank spoke of a “black Monday on the oil market”. He experienced the biggest daily loss since the Gulf War in 1991. Saudi Arabia has opened a new price war for market share with the announcement of higher production volumes and lower prices. The oil market is threatened by a massive oversupply in the second quarter, especially since demand due to the Covid 19 pandemic is likely to remain severely affected for some time to come.
With regard to the Covid-19 virus, economic data from China became a testimony to the economic consequences: In the country of the outbreak, where the novel corona virus has been crippling public life for weeks, exports plummeted in January and February compared to the same months in the previous year. The US government is rumored to be working on an aid package for the US economy to mitigate the economic impact./bek/fba
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