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* S&P 500 down 6% after flirting with fresh trading halt
* Boeing slumps after call for $60 bln lifeline
* General Mills ups forecast on bulk-buying (Adds quote, updates details)
By Medha Singh and Sanjana Shivdas
March 18 (Reuters) - Wall Street’s four-week slump deepened on Wednesday as investors priced in a complete breakdown in business activity and consumer spending from the coronavirus pandemic.
With airports and hotels emptying and airlines asking staff to take unpaid leave to stem losses, the S&P 1500 airlines index sank 16.8%, while shares in Hilton, Marriott and Hyatt hotels fell by 20% to 30%.
President Trump’s request for Congress to approve $500 billion in cash payments to taxpayers along with $50 billion in loans for airlines did little to stem the bleeding and by noon the Dow and S&P were both down more than 6% on the day.
Shares in Boeing Co, long a symbol of U.S. tech and industrial power, sank another 15.2% and are now down more than 60% since the start of the year.
“We’re going to have massive disruption and dislocation in our economy,” said Keith Bliss, managing partner at iQ Capital in New York.
“People are conflating what’s going on with the coronavirus with what happened in the global financial crisis.”
With Trump activating disaster management agency Fema across the country, Senate leader Mitch McConnell said it would vote on coronavirus legislation at 2 p.m. et.
Wall Street’s main indexes had bounced on Tuesday from a massive selloff a day earlier, as the Trump administration pressed for a $1 trillion stimulus package and the Federal Reserve relaunched a plan to purchase short-term corporate debt.
But dramatic stimulus measures have only provided short-lived bounces in equities with investors factoring in a global recession and estimates for the duration of the damage extending into the summer.
Although the Trump administration sought more than $150 billion for additional loans to “distressed economic sectors”, including airlines on Wednesday, the benchmark S&P 500 slipped 5.1%.
The index was also inching close to the 7% threshold that triggers a 15-minute trading halt - a familiar feature of two weeks of big swings in markets that have shattered Wall Street’s longest ever bull run.
Worries about mass debt defaults or writedowns pressured U.S. lenders, sending the S&P 500 banking subsector down 6.9%.
“If you have lots of companies drawing down their credit facilities to make sure that they can keep their businesses running then it’s a reasonable assumption that banks will have some credit problems down the road,” Bliss said.
Apple Inc dropped 2.7% as analysts anticipated a significant blow to its business from temporary store closures. Even Cheerios maker General Mills Inc, which raised its profit forecast citing consumer bulk-buying, fell 3.1%.
Boeing Co, just a year ago seen as a perpetual growth stock and , has now lost more than 60% of its value in this quarter, while the market overall has fallen by around a third since scaling record highs mid-February - or around $7 trillion in value.
The collapse into a bear market, among the fastest in history, has spurred some calls for a pause in trading. Treasury Secretary Steven Mnuchin late on Tuesday reiterated the administration will keep markets open, while suggesting trading hours could be shortened at some point.
The idea of shortened hours drew immediate opposition from a number of leading investors and exchange managers, who said it would harm the market’s credibility.
At 11:52 a.m. ET, the Dow Jones Industrial Average was down 1,170.76 points, or 5.51%, at 20,066.62, while the S&P 500 was down 128.82 points at 2,400.37. The Nasdaq Composite was down 303.01 points, or 4.13%, at 7,031.77.
In a bright spot was Walmart Inc, up 5.9%, after Credit Suisse said the retailer would benefit from a structural change in consumer behaviour towards online shopping in the wake of the COVID-19 situation.
Kroger Co jumped 8.2% while Costco Wholesale Corp rose 1.2%.
Energy stocks tumbled nearly 10% as oil prices crashed leading declines among all 11 S&P sectors.
Declining issues outnumbered advancers about 13-to-1 on the NYSE and 6-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and 220 new lows, while the Nasdaq recorded eight new highs and 681 new lows. (Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Shounak Dasgupta and Sagarika Jaisinghani)