Stocks continued their plunge Thursday, as President Donald Trump’s latest effort to address the coronavirus outbreak — a ban on the entry from most European countries to the United States — disappointed investors who have been waiting for Washington to take steps to bolster the economy.

Trading was turbulent, with stocks staging a brief comeback as investors reacted to the Federal Reserve’s decision to offer at least $1.5 trillion worth of loans to banks to help smooth out the functioning of the financial markets. But the selling picked up again by midafternoon.

The S&P 500 closed down about 9.5%, its biggest daily drop since the stock market crashed in 1987, on what came to be known as Black Monday. The decline has left stocks in the United States firmly in a bear market — a term that signifies a decline of 20% from the most recent highs.

For the Dow Jones industrial average, the drop of 10% was also its worst since the 1987 stock market crash.

The travel ban hit shares in Europe particularly hard, with major stock indexes there down more than 10% and one regional bench mark suffering its worst-ever decline. It also battered airline stocks. And, with oil prices falling, energy companies were among the day’s biggest losers, too.

Waves of selling have come as investors have been dismayed by Washington’s inability to rally around a meaningful response to the economic toll the outbreak will take. Trump said Wednesday that he would extend financial relief for sick workers and would ask Congress for more. But he remained at loggerheads with Congress on more comprehensive measures.


The most notable step Trump announced Wednesday, that the United States would stop travel from most European countries outside Britain for 30 days, hurt financial markets more than it helped. And on Thursday, he said he could restrict domestic travel to regions of the United States when the coronavirus becomes “too hot.”

“Until there are details on the steps that leadership intends to pursue to remedy the economic effects of the viral outbreak, equity markets will be vulnerable,” said Carl Tannenbaum, chief economist at Northern Trust.

The Federal Reserve Bank of New York responded Thursday to increasingly fraught market conditions by announcing that it would offer at least $1.5 trillion worth of short-term loans to banks Thursday and Friday and change the structure of its ongoing asset purchase program.

Analysts viewed the moves as warranted given funding constraints on Wall Street.

“This is a full-blown crisis response operation, intended to make it abundantly clear that the Fed will not allow liquidity to dry up,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note.

Oct. 19, 1987, became known as Black Monday on Wall Street, when the Dow Jones industrial average fell 22.6%. In London, Black Monday was spread over two days — with the FTSE 100 in London falling 10.8% on Monday and 12.2% on Tuesday.


On Thursday, stocks in both countries suffered their worst single-day drop since then — surpassing its biggest decline of the financial crisis in 2008.

But unlike stocks in the United States, trading in London has been volatile for years as investors faced the uncertainty of Britain’s exit from the European Union and the economic chaos that might cause. But the fast spread of the coronavirus in Europe has hit the index, and its counterparts on the European continent, particularly hard.

The FTSE 100 is down about 30% since the start of the year, compared with the S&P 500’s drop of about 25%.

Most Americans surveyed are worried about the economic impact of the coronavirus outbreak, with concern greatest among Democrats and independent voters, according to a nationwide poll conducted by online research firm SurveyMonkey for The New York Times.

The partisan gap in attitudes in the survey, which was begun last week and completed Sunday, may reflect Republicans’ greater receptivity to Trump’s assurances that the economy remains strong and that the virus is under control in the United States.

Three-quarters of independents and more than 8 in 10 Democrats said they worried that the virus outbreak would hurt the economy. Two-thirds of Republicans expressed similar concern.


The Institute of International Finance cut its forecast for U.S. economic growth sharply last week, and on Thursday it said things will be even worse because of the surge in oil prices and increasing risk of “credit stress.” As a result, the think tank has raised its projection for the possibility of a recession.

As the coronavirus spreads, policymakers are limited in what they can do to protect the economy, wrote Robin Brooks, the institute’s chief economist, and his colleague Jonathan Fortun. Money is tumbling out of emerging market countries, a sign of investor fear, at a pace not seen even during the 2008 financial crisis, based on IIF data.

“(A) global ‘sudden stop’ is in the making, one that could present substantial downside risk to our forecasts,” they wrote, noting that a similar seizing up in foreign financing came at huge economic cost to both Turkey and Argentina in 2018.