It has already been a roller-coaster week for U.S. financial markets.
The New York Stock Exchange will temporarily close its trading floors and switch to all-electronic trading beginning when markets open next Monday amid the novel coronavirus outbreak.
“Trading and regulatory oversight of all NYSE-listed securities will continue without interruption,” its operator, Intercontinental Exchange, Inc., said in a statement Wednesday.
The facilities that will be closed include the equities trading floors in New York and San Francisco.
“While we are taking the precautionary step of closing the trading floors, we continue to firmly believe the markets should remain open and accessible to investors,” Stacey Cunningham, the president of the New York Stock Exchange, said in a statement. “All NYSE markets will continue to operate under normal trading hours despite the closure of the trading floors.”
The news comes after a roller coaster past few weeks for U.S. financial markets.
The Dow Jones Industrial Average tumbled Wednesday, closing down by more than 1,300 points or 6.28%, in another day of massive volatility over the novel coronavirus crisis.
The S&P 500 fell 5.17% to 2,398 and the Nasdaq slipped 4.7% to 6,989 by the time the markets closed. The Dow closed at 19,898, just a few hundred points above the level it was when President Donald Trump took office in January 2017. During intraday trading, the index slipped below that mark.
Trading was briefly halted just before 1 p.m. after the S&P 500 dipped below the 7% threshold.
“I think what we’re seeing today and in recent weeks is a market that has nothing to … steady it. The economic data won’t show anything positive for quite a while and markets can’t really give any credible outlook on earnings right now,” Jeffrey Kleintop, the chief global investment strategist at Charles Schwab, told ABC News.
“While the markets may bounce on news of new stimulus like it did yesterday, it’s unlikely to bottom until we see that peak in new virus cases, so we just don’t know when that will be,” Kleintop noted.
He added that “we are very likely in a recession already, but we just don’t know the depths.”
But when the “shock begins to recede, growth should come back fairly quickly,” he said.
Among the worst performers for the Dow Wednesday were Boeing and the Chevron Corp which both shed more than 20%. The third worst performer for the index was the Travelers Co., which lost more than 15%.
Meanwhile, WTI Crude Oil tumbled nearly 17%. Gold slipped 2%.
It has already been a roller-coaster week for equity markets as the novel coronavirus crisis continues to sow massive uncertainty on the global economy. On Monday, the Dow suffered its worst day since the “Black Monday” crash of 1987, dropping nearly 3,000 points or 12.94%. On Tuesday, however, the index rebounded more than 1,000 points, or over 5%, as Trump administration officials touted a major stimulus package.
“When there is an event that leads to selling, such as coronavirus uncertainty, it catapults into more selling,” David Bahnsen, the chief investment officer of the Bahnsen Group, said in a commentary Wednesday. “This creates downward pressure on almost all assets, including good assets.”
He continued, “All of the panic and margin selling eventually runs its course. It’s an incredibly bad time for people who don’t have to sell to be selling — because they are selling into an avalanche.”