The DJIA index closed the day with a 1,464.94 point loss, while the S&P 500 fell by 140.85 points. The Nasdaq Composite dropped by 392.20 points. Wednesday’s closing figures follow an 1,100-plus-point rally made by stocks on Tuesday after traders experienced one of the worst losses since December 2008 on Monday.
Throughout the day’s trading, various companies experienced gains and falls, including exploration and production company Apache Corp., which saw its shares drop more than 18% on news of declining oil prices, CNBC reported.
Increased Oil Production Sends Prices Tumbling
Earlier in the day, Saudi Arabia revealed plans to increase its oil output by 1 million barrels per day (bpd), ramping up the total production capacity to 13 million bpd. Additionally, the United Arab Emirates’ Abu Dhabi National Oil Company indicated that it too would be kicking up its production to over 4 million bpd in April.
Both announcements later forced Brent crude, the global benchmark for oil prices, to drop by roughly 2.9% to $36.14 per barrel. The move by both countries follows that of the Organization of Petroleum Exporting Countries (OPEC) on Monday to cut oil prices in anticipation of a major decline in oil purchases due to the novel coronavirus outbreak.
Although it’s presently unclear just when Saudi officials expect to reach their new goal of an additional 1 million bpd, experts have suggested that the move could take more than just a few months to achieve.
“This is going to take several years,” Ian Thom, a research director at UK-based consultancy group Wood Mackenzie Ltd., told Bloomberg. “Four or five years might be a rule of thumb for a big, greenfield mega-project. It might be a little easier if they do some expansion at existing operations - that might be quicker, but it’s hard to see that generating an additional million barrels a day.”
Pandemic Declared as Global COVID-19 Cases Increase
Other firms such as hospitality company Hilton Worldwide, tech giant Apple and both Royal Caribbean Cruises and Norwegian Cruise Line saw their shares take quite the hit as the COVID-19 outbreak was declared a pandemic by the World Health Organization (WHO).
Hours before trading wrapped up for the day, WHO Director-General Dr. Tedros Adhanom Ghebreyesus told reporters at a conference that after having assessed the situation, officials concluded that the COVID-19 outbreak can officially be viewed as a pandemic.
“In the past two weeks the number of cases outside China has increased thirteenfold and the number of affected countries has tripled,” the director-general said. “In the days and weeks ahead, we expect to see the number of cases, the number of deaths and the number of affected countries to climb even higher.”
“We’re deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction,” he said, just before declaring the pandemic. “We have rung the alarm bell loud and clear.”
The latest figures noted by the Johns Hopkins Center for Systems Science and Engineering indicate that more than 120,000 COVID-19 cases have been confirmed, and that with more than 4,300 deaths have been documented.
In the US, at least 30 individuals have died after contracting the COVID-19 virus. Twenty-four of the deaths were recorded in Washington state.
US President Donald Trump has attempted to ease concerns in the Land of the Free by signing a $8.3 billion emergency funding bill to finance vaccine research, preparedness efforts and prevention measures and calling on the US central bank to cut interest rates. However, the Trump administration’s latest efforts to mitigate financial concerns have yet to manifest as negotiations regarding a potential relief package are just beginning.
