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SFGATE: Stock futures sink after Fed cuts interest rate to almost zero

Stock futures sink after Fed cuts interest rate to almost zero
Published on March 16, 2020 at 04:50AM by

NEW YORK (AP) — Stock markets are set for another week of turbulent trading as U.S. index futures fell sharply after the Federal Reserve slashed interest rates and more companies and governments took action over the weekend to shut down European and American society.

Futures for the S&P 500 and the Dow Jones Industrial Average fell 5% Sunday night, triggering a halt in trading. The price of oil fell about 5% while gold gained about 2%.

Stocks are coming off a dizzying week that saw the Dow twice fall by more than 2,000 points and also record it's biggest point gain every — 1,985 points on Friday. The bull market that began in 2009 in the depths of the financial crisis came to an end. Europe markets suffered similarly sharp declines.

The Fed cut its key rate by a full percentage point — to a range between zero and 0.25% — and said it would keep it there until it feels confident that the economy can survive a sudden near-shutdown of economic activity in the United States. The surprise announcement signaled the Fed's concern that the viral outbreak will depress economic growth in coming months and that it is prepared to do whatever it can counter the risks.

The fact the Fed made its move before a meeting scheduled for mid-week indicated the Fed policymakers felt they needed to act immediately to shore up financial markets and investors' confidence. Although U.S. stocks did recoup some of last week's losses with a big rally on Friday, most market watchers expected to see more volatility ahead with the number of coronavirus cases still expected to rise in the U.S. and more industries facing a downturn in their business.

American Airlines said over the weekend that it was sharply cutting international flights. Walmart is limiting store hours to ensure they can keep sought-after items such as hand sanitizer in...

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