WASHINGTON (dpa-AFX) - After seeing some early volatility, stocks have moved significantly lower over the course of morning trading on Monday. With the steep drop on the day, the Dow and the S&P 500 have tumbled to new three-year lows.
Currently, the major averages remain firmly in negative territory. The Dow is down 477.20 points or 2.5 percent at 18,696.78, the Nasdaq is down 67.77 points or 1 percent at 6,811.75 and the S&P 500 is down 58.74 points or 2.6 percent at 2,246.18.
The weakness on Wall Street comes even though the Federal Reserve announced extensive new measures to support the economy during the coronavirus pandemic.
Citing the tremendous hardship being caused by the outbreak, the Fed said it is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time.
The measures announced today include an unlimited expansion of the Fed's asset purchases, with the central bank saying it will purchase Treasuries and mortgage-backed securities 'in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.'
The Fed had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.
News that a massive fiscal stimulus bill failed a key procedural vote in the Senate on Sunday may be offsetting any positive sentiment generated by the Fed announcement.
Voting largely along party lines, Senators voted 47 to 47 on the procedural motion, falling short of the 60 votes needed to advance the bill.
Democratic Senators voted against advancing the bill amid complaints that the legislation does too much to bail out companies and not enough to provide assistance to workers.
Meanwhile, Senate Majority Leader Mitch McConnell, R-Ken., accused Democrats of 'fiddling with the emotions of the American people, fiddling with the markets' and 'fiddling with our health care' and urged lawmakers to reach an agreement no later than today.
The latest developments come as data from Johns Hopkins University shows the number of confirmed coronavirus cases has climbed above 350,000 worldwide, with confirmed cases in the U.S. jumping above 35,000.
Telecom stocks are seeing substantial weakness on the day, with the NYSE Arca North American Telecom Index plunging by 8.1 percent to its lowest intraday level in over seven years.
Interest rate-sensitive utilities, commercial real estate, and housing stocks have also shown significant moves to the downside.
Financial, healthcare and transportation stocks are also seeing considerable weakness, while gold, semiconductor and oil service stocks have shown strong moves to the upside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. China's Shanghai Composite Index plunged by 3.1 percent and Australia's S&P/ASX 200 Index plummeted by 5.6 percent, although Japan's Nikkei 225 Index bucked the downtrend and jumped by 2 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 3.7 percent, the French CAC 40 Index is down by 2.8 percent and the German DAX Index is down by 2.1 percent.
In the bond market, treasuries have moved sharply higher following the news of the Fed's unlimited bonds purchases. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 20.7 basis points at 0.731 percent.
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