Dow Plunges 2,000 Points: FED Increases Cash Injection

(Fox News) The Dow Jones Industrial Average was down by as many as 2,046 points, or 7.9 percent, in the opening minutes of trading while the S&P 500 and Nasdaq Composite were lower by 7.4 percent and 7.3 percent, respectively. Trading, which was already halted for 15 minutes, will see another stoppage if the S&P 500 trades down 13 percent.

U.S. equity markets were sharply lower Monday morning after an oil price war broke out between Saudi Arabia and Russia and the new coronavirus showed signs of spreading.

The steep slide has caused the New York Federal Reserve to increase its daily cash injections into the banking system to $150 billion from $100 billion.

The stock-market selloff comes after a production dispute between OPEC members, led by Saudi Arabia, and Russia sent West Texas Intermediate crude oil, the U.S. benchmark, plunging by as much as 33.8 percent, the most since the outbreak of the 1991 Persian Gulf War, to a low of $27.34 a barrel in overnight trading. After a small rebound, WTI was trading down 21.4 percent at $32.42 a barrel.

Oil majors, including Exxon Mobil, Chevron and BP, were sharply lower, as were service providers Haliburton and Schlumberger.

The drop in Treasury yields accompanies expectations the Federal Reserve will cut rates by 100 basis points at its March 18 meeting, lowering its key interest rate to a range between 0 and 25 basis points.

The expectation of the oversized rate cut is putting pressure on financials, which typically make 50 percent to 75 percent of their net revenue from the spread between the interest paid to depositors and the interest charged to borrowers. Lower rates mean the banks will make less per loan.