By Yasin Ebrahim
Investing.com –The Dow resumed its plunge toward session lows Monday, paced by financials after a short-lived breather on the back of hopes of more stimulus to combat the Covid-19 impact on the economy following the Federal Reserve’s rate cuts and liquidity initiatives.
The S&P 500 fell 8.2%, the Nasdaq Composite lost 8.6% and the Dow Jones Industrial Average fell 9.1%.
With little evidence that countries outside of China are making progress to curb the spread of Covid-19, investor fears concerning a virus-led global recession continued to grow.
Financials led the broader move lower after major banks scrapped plans to buy back shares in order to maintain sufficient capital to keep credit lines open to customers.
Several banks, including Bank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM) and Morgan Stanley (NYSE:MS), temporarily halted share buybacks for the remainder of the first quarter and the second quarter of 2020.
Airlines, meanwhile, helped limit losses in the broader market after rising from lows on after reportedly calling on the government to shell out more than $50 billion in aid to curb the impact on travel demand from the coronavirus.
United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) fell 17% and 8% respectively, while American Airlines (NASDAQ:AAL) was down 1%.
As well as bailout for airlines, Senate Minority Leader Chuck Schumer is reportedly proposing $750 billion for a third coronavirus bill, “to deal with hospital capacity issues, expand unemployment insurance, fund emergency child care, assist schools on remote learning, assist seniors’ needs for medicine/food delivery and to use DOD resources,” CNN reported.