Stocks nosedive on Wall Street

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The rally came after a roller-coaster day that earlier saw the Dow fall below 20,000 for the first time in more than three years to an intraday low of 19,882.26 - less than 100 points above where the index closed on the day of President Trump's January 20, 2017 inauguration. The S&P 500 lost 324.89 points, or 11.98%, to 2,386.13 and the Nasdaq Composite dropped 970.28 points, or 12.32%, to 6,904.59.

Goldman Sachs strategists in a note to clients on Sunday warned that the S&P 500 could fall to 2,000 points by the middle of the year, a 41 percent drop from record highs a month ago.

The circuit breaker was also triggered for the third time in the last week, leading to a 15-minute halt in trading shortly after the opening.

Most market watchers at this point are bracing for the likelihood that the economy is headed for a recession, but they said it is too early to know the full extent of the economic downturn.

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United States officials are "trying to communicate that we're going to do whatever it takes", said Jim Paulsen, chief investment strategist at the Leuthold Group.

Stocks plunged following a series of measures announced by the US Federal Reserve, including slashing interest rates to almost zero and the buying of $700 billion in Treasurys and mortgage-backed securities, in a bid to stabilise the US economy amid the COVID-19 pandemic.

Monday's trading halt marks the third time since the coronavirus outbreak that US markets have paused activity.

The bounceback came amid reports that the Trump administration would push for an $850 billion stimulus package - including a payroll tax cut and $50 billion in aid to the airline industry - to blunt the coronavirus's economic impact.

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Some analysts are concerned that the US Federal Reserve may have reached the limits of its power to fend off recession as the coronavirus spreads. Most see the benefits of doing shuttering the markets until authorities can get a better handle on the virus, but struggle to support something that might impede the free market. The Federal Reserve reintroduced additional crisis-era tools to stabilize financial markets.

Mnuchin also said the stock market will remain open despite the recent volatility, although he said its hours could be shortened if needed.

The S&P 500 fell close to 12%.

Investors also are not yet convinced that all the rushed, panicked responses are gaining traction.

It heightened alarm about the rapid spread of the pandemic and how it has paralyzed parts of the global economy and squeezed company revenue.

Despite the intense volatility, the markets should stay open, the head of the US securities regulator said, quashing speculation that the government might shut down the country's exchanges to stop the plunge in stock prices.

"The only thing that is going to calm the market is seeing the number of cases go down".

"Reducing interest rates to borrowers will ease the burden of existing debts slightly but is unlikely to spur the usual surge of borrowing as consumers and businesses batten down the hatches for a coming drop off in USA economic activity", Greg McBride, chief financial analyst at Bankrate.com, said. "This is going to be playing out in the markets for many more weeks than two weeks".

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