March 9 (UPI) -- Markets plummeted Monday activating a safety mechanism that briefly halted trading in the morning as oil stocks slid and concern about the coronavirus scared of traders.
The Dow Jones Industrial Average closed down 2,000.70 points, or 7.74 percent, while the S&P 500 slid 7.6 percent and the Nasdaq Composite dropped 7.29 percent after a 15-minute halt early in trading.
A built-in safety mechanism designed to avert a free fall stopped trading on the New York Stock Exchange just after 9:30 a.m. EDT, spurred by falling oil prices and further concern about the coronavirus outbreak. Saudi Arabia said earlier Monday it would increase oil production in response to Russia declining to join OPEC in curtailing production.
The last time the safety mechanism -- a circuit breaker that cuts power to critical market infrastructure -- stopped trading was December 2008 during the financial crisis. The breaker was installed following the "Black Monday" crash of Oct. 19, 1987, which saw the Dow lose more than 22 percent of its value.
The breaker trips when certain activity on the Dow or S&P 500 is detected. Known as a "side car," the safeguard has been activated only on rare occasions in the last 30 years.
The yield on the benchmark 10-year Treasury note fell below 0.5 percent for the first time as the 30-year rate hit 1 percent.
The markets have been volatile in recent weeks over fears of COVID-19 becoming a global pandemic.
Overseas, stock markets closed sharply down in Asia and were down late in Europe.
"There's always winners and losers in any market, but right now the idea that lower gasoline prices are going to put more cash in workers' pockets and give consumer spending and the economy a boost doesn't seem to cushion the blow for stock market investors," Chris Rupkey, MUFG's chief financial economist, said. "They want out. Big time. The sky is falling."
The coronavirus already had markets rattled before the Saudi announcement. Some businesses have told workers to stay home and telecommute while universities like Stanford and Columbia are postponing classes.
Brent crude futures fell 29.07 percent to $32.11 per barrel, while West Texas Intermediate crude futures dropped 30.98 percent to $28.49 per barrel.
"If you ever wondered what would happen if someone lobbed a hand grenade into a bloodbath, now you know," Tom Holland of investor advisory firm Gavekal, said. "It's not pretty.
"Investors logging onto their screens on Monday have been greeted by a sea of red, the like of which has not been seen for 10 years."