Wall Street Futures Suspended 'Limit Down'; Circuit Breaker Halts S&P 500 As Global Markets Plunge

U.S. equity futures trading was suspended Monday after falling 5% amid a global stock market rout, setting Wall Street up for an uncertain opening.
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The New York Stock Exchange triggered circuit breakers that halted trading on the S&P 500 Monday, following and an earlier suspension for Wall Street futures, leaving safe-haven assets such as Treasuries to bear the brunt of an ongoing rout for global stocks.

The S&P 500 was halted from trading for 15 minutes shortly after the opening bell after the broadest measure of U.S. stocks fell 7%, or 208.16 points, to 2764.21 points. After the circuit breaker was lifted at 9:49 am Eastern Time, the S&P was last seen 7.55% lower at 2,835.26 points.

The Dow, meanwhile, fell 7.29% to 23,797.90 points and was also halted, before extending its decline past 2,000 points when trading resumed. It then pared that decline to around 2,100 points by 2:05 PM Eastern time to slip under the 24,000 point mark. 

"In this volatile environment, there is a flurry of activity with traders moving in and out of positions to capture profits and limit losses. And the goal of these circuit breakers is really to help the markets take a breather and inject some liquidity back into the system," said Rick Swope, senior director for investor education at E*TRADE. "Today is already shaping up to be a wild day and while it remains to be seen if more circuit breakers will be pulled, it’s not completely out of the question."

Futures contracts tied to S&P 500 were marked 5% lower in the opening minutes of pre-market trading and had indicated a 151.37 point opening bell decline, before trading was halted under existing exchange rules that were last triggered during the market turmoil on election night in November 2016. 

Active trading in the main SPDR S&P 500 ETF SPY, however, continues, with the market's biggest passive investment vehicle slumping 6.3% to change hands at $278.70 each. The SPDR Dow Jones Industrial Average ETF DIA, meanwhile, was last seen 6.5% lower at $242.04 each.

The so-called "circuit breakers", which will trigger immediate trading halts for the S&P 500 if the benchmark were to fall 7% at any stage during the session - apart from the final 35 minutes of trading.

The first 'circuit' would halt trading for 15 minutes if the S&P 500 were to trade at 2764.30 points or lower. If markets extend the decline to 13% on the session, trading would be suspended for another 15 minutes. A 20% decline, however, would shut down trading for the remainder of the day.

With U.S. futures prices suspended in the pre-market session, however, investors were left with few alternatives with which to execute trades that reflect the domestic market impact of both the global sell-off and the potential economic impact of the coronavirus. 

U.S. Treasury bonds, one of the world's most liquid financial instruments, were subsequently active in early Monday trading, with safe-haven flows driving bond prices higher -- and yields correspondingly lower -- in markets around the world.

Benchmark 10-year note yields fell to a fresh all-time low of 0.318% in overnight trading, before easing to 0.49% amid the biggest single-day decline since 2009. Thirty-year bond yields, meanwhile, tumbled to a record low of 0.85%.

European stocks were also under enormous pressure amid the global sell-off, with the Stoxx 600 benchmark tumbling 7% to bring the broadest measure of regional shares into bear market territory -- defined as a 20% pullback from a recent peak -- heading into the close of trading.

In Germany, the trade-sensitive DAX performance index fell 7.9%, a move that puts it on pace for its biggest one-day decline since reunification while Britain's FTSE 100 plunged 7.7% to take the benchmark back to levels last seen during the 2016 Brexit sell-off.

Overnight in Asia, the yen's rise, as well as predictions of a global recession from the knock-on effects of travel restrictions, business closures and lost capacity from the coronavirus, sent Japan's Nikkei 225 more than 5% lower on the session to close under the 20,000 point mark for the first time in more than 14 months.

Notable declines in China and South Korea, as well as Hong Kong and Australia, pulled the region-wide MSCI ex-Japan benchmark 5.1% lower heading by the close of trading.

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