MARY LOUISE KELLY, HOST:
We have heard this before. Stocks slid downward today. That slide has now been greased with cheap crude oil. The Dow Jones Industrial Average plunged more than 2,000 points today. That's more than 7.5%. The sell-off got so frantic, at one point this morning, trading was temporarily stopped. It is the first time that has happened in more than two decades. NPR's Scott Horsley is here to help us try to make sense of this. Hey, Scott.
SCOTT HORSLEY, BYLINE: Good afternoon, Mary Louise.
KELLY: It has been quite a day, and it was right from the opening bell, right? Traders were looking to dump stocks. They started dumping. Just what were those first few minutes like?
HORSLEY: Futures markets had been signaling a bloodbath all morning. And as soon as the opening bell sounded, stocks just went off a cliff. In the first six minutes of trading, the S&P 500 index plunged 7%. Now that's the trigger for an automatic circuit breaker, which temporarily halts stock trading for 15 minutes. Those circuit breakers were put in place after the 1987 market crash. And this was only the second time in the two-plus decades since that they've been activated.
Stacey Cunningham, who's president of the New York Stock Exchange, told CNBC the idea is to give investors a chance to catch their breath.
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STACEY CUNNINGHAM: The market-wide circuit breakers are designed to slow trading down for a few minutes and to give investors a time to absorb information and respond. And it's really, you know, a precautionary measure that we've put in place, so that the market can slow down for a minute.
HORSLEY: Now when trading started up again after 15 minutes, it was a little more orderly for much of the day. Prices bounced around a little bit during the afternoon. But just in the closing minutes, we saw a continued sell-off.
KELLY: Now the other factor going on today is this shock I mentioned to the world oil market. Just briefly, what is happening with that?
HORSLEY: Yeah, oil prices have been under pressure for a while because of falling demand around the world. And Saudi Arabia, a leading oil producer, has been trying to forge an agreement with Russia to curb output, to try to put a floor under the price. Russia, though, has been unwilling to go along. So over the weekend, the Saudis did a complete 180 and said, OK, we're going to open the taps on our oil fields and cut the price of oil. As a result, we saw the price of crude tumble about 25% today. That completely unexpected development made already nervous investors even more so. I know that falling oil prices sound like a windfall for consumers - and it likely will mean lower prices at the gas pump - but remember the U.S. is now a major oil producer, and the companies behind that energy boom and the people who work for them are going to be hurting because of this drop.
KELLY: Now you mentioned investors were already nervous. They were already nervous in large part because of coronavirus, which they knew was bad. What are they watching for in terms of where things might go next?
HORSLEY: We are seeing continued escalation in the number of cases here in the United States, reflecting both the spread of the virus but also some improvement in testing. We've seen a doubling of new cases in Italy, where the Italian government has now issued stricter quarantine orders for some 17 million people in the northern part of that country, the industrial heart of Italy. The news from China is actually better. The number of new cases there has been tapering off, but the restart to China's economy is just taking longer than some analysts had expected. And the blow to economies in Europe and here in the U.S. look to be more severe than had been forecast. Obviously, the travel industry is getting hit hard. Airlines and cruise ship companies are taking a hit. Factories are bracing for more supply chain challenges. And there's still just a lot of uncertainty about how far this goes and how long it lasts.
KELLY: Yeah. And in terms of what policymakers can do to try to limit the damage to the economy, what's on the table?
HORSLEY: We're starting to see some response from lawmakers and others but nothing really coherent yet. The Republicans at the top of the Senate Finance Committee are talking about maybe some targeted tax relief, but they're not offering any specifics. Congressional Democrats want measures more targeted to consumers and workers, like paid sick leave for people who don't have it, so they can afford to stay home if they have to. There seems to be recognition that this is serious enough to warrant a response but no real agreement yet on what their response should be.
KELLY: Thank you, Scott.
HORSLEY: You're welcome.
KELLY: NPR's Scott Horsley. Transcript provided by NPR, Copyright NPR.
