By Noreen Burke
Investing.com - U.S. stocks futures plunged to levels that halted trading on Monday after a massive rout in oil prices added to fears that the economic fallout from the rapidly spreading coronavirus will deepen, leading to a U.S. recession and a credit crunch.
Before circuit-breakers kicked in Dow futures were down 1,256 points, or around 4.8%. S&P 500 futures and Nasdaq 100 futures were both down around 4.9%.
The move triggered another response from the Federal Reserve, which increased the amount of liquidity on offer at its daily and two-week repo operations. Daily operations will offer at least $150 billion, up from $100 million, while the two operations on Tuesday and Thursday will offer at least $45 billion, up from $20 billion.
Oil prices crashed over 20% in what was on track to be the largest one-day decline in nearly 30 years on Monday after Saudi Arabia launched a price war with Russia in a market already oversupplied as a result of a virus-induced collapse in demand.
The rout in oil prices was compounded by fears over the prospect of a U.S. recession and a freeze in credit as the economic fallout from the virus worsens.
Over the weekend, Italy, the country worst affected by the virus in Europe, locked down much of its wealthy north, including the financial capital Milan, in a move aimed at containing the outbreak. The number of deaths leaped again on Sunday.
As of Sunday, more than 109,000 people have been infected around the world, with at least 3,600 deaths.
Investors continued to pour into safe haven assets, sending the yield on the benchmark 10-year Treasury note to historic lows of 0.425%. Gold futures, another safe haven asset, rose above the $1,700 level for the first time in eight years.
--Reuters contributed to this report