Futures slump as stimulus high fades, Boeing tumbles

[March 18, 2020]  By Medha Singh

(Reuters) - U.S. stock index futures tumbled on Wednesday, pointing to another volatile session for Wall Street as a bounce from sweeping stimulus measures was eclipsed by growing signs of coronavirus damage to corporate America.

Boeing Co fell another 17% in premarket trading as the planemaker called for a $60 billion bailout for U.S. aerospace manufacturers facing the fallout of an extended collapse in global travel.

S&P 500 e-minis fell 92 points, or 3.69%, hitting their daily down trading limit, while the SPDR S&P 500 ETFs plunged 6.5%, signaling that the benchmark index could see a 7% fall at opening - triggering another 15-minute halt.

"We're just in panic mode here," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"The fear of, maybe, deflation setting in, is probably one of the reasons why the market is acting the way it is."

Wall Street's main indexes had bounced on Tuesday from a massive selloff a day earlier, as the Trump administration pressed for a $1 trillion stimulus package and the Federal Reserve relaunched a plan to purchase short-term corporate debt.

However, investors fear that even dramatic stimulus will not be able to avert a deep recession as the COVID-19 disease continues to spread rapidly across the globe and estimates for the duration of the damage extend out into the summer.

A trader works on the floor of the New York Stock Exchange shortly before the closing bell in New York, U.S., March 17, 2020. REUTERS/Lucas Jackson

In the latest signs of corporate stress, FedEx Corp slumped 4.2% after suspending its 2020 profit outlook and announcing cost cuts.

Even Cheerios maker General Mills Inc, which raised its profit forecast citing bulk-buying of its products, fell 6%, while the main U.S. airlines dropped between 5.7% and 9.3%.

Boeing, just a year ago seen as a perpetual growth stock and a symbol of U.S. tech and industrial power, has now lost more than 60% of its value this quarter and the market overall has fallen by around a third.

At 7:24 a.m. ET, Dow e-minis were down 821 points, or 3.92% and Nasdaq 100 e-minis were down 328 points, or 4.43%.

(Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Shounak Dasgupta and Sagarika Jaisinghani)

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