The Dow Jones has tumbled more than 700 points as investors fled to safe-haven assets after new orders for US-made goods plunged to an 11-year low and private payrolls fell for the first time since 2017.
The blue-chip Dow and the S&P 500 had ended their previous session with their worst opening quarters in history as efforts to contain the virus resulted in deserted shopping streets, massive staff furloughs and a halt in business activity.
Meanwhile, the collapse in oil prices brought about its first major casualty with Whiting Petroleum filing for Chapter 11 bankruptcy protection. Its shares slumped 42 per cent.
“There is no easy way to quantify either the economic shutdown or what the eventual recovery is going to look like as the monetary and fiscal policy initiatives are as historic as the economic decline,” said Art Hogan, chief market strategist at National Securities in New York.
Companies on the benchmark index have lost more than $US5.6 trillion ($A9.1 trillion) in market value so far this year, despite trillions of dollars in fiscal and monetary stimulus that helped equity markets claw back some of the sharp declines last week.
On Tuesday, US President Donald Trump warned of a “painful” two weeks ahead, with White House health officials modelling an enormous jump in virus-related deaths even with strict social distancing measures.
US real estate, utilities and consumer staples stocks, which had held up so far as they are considered stable during times of extreme volatility, fell between 1.0 per cent and 6.7 per cent.
Goldman Sachs now expects sequential real US GDP to plummet 34 per cent in the second quarter on an annualised basis, foreshadowing a deep economic slump.
“Talk of a bottom in equity markets still seems remarkably premature given the continued increase in infection and death rates across Europe and the United States,” said Michael Hewson, chief market analyst at CMC Markets in London.
With the quarterly reporting season set to begin in two weeks, S&P 500 companies are expected to enter an earnings recession in 2020, falling 3.7 per cent in the first quarter and 9.6 per cent in the second.
In early trading on Wednesday, the Dow Jones Industrial Average was down 658.21 points, or 3.00 per cent, at 21,258.95, the S&P 500 was down 82.63 points, or 3.20 per cent, at 2,501.96 and the Nasdaq Composite was down 213.20 points, or 2.77 per cent, at 7,486.90.
Interest-rate sensitive stocks on the banking index fell 5.0 per cent while airlines, hotels and cruise operators shed between 5.0 per cent and 7.0 per cent.
The energy sector shed another 3.0 per cent, with experts now saying oil prices could touch single digits, exacerbated by a share tussle among top producers as the world runs out of storage space.
Declining issues outnumbered advancers more than 13-to-1 on the NYSE and 6-to-1 on the Nasdaq.
The S&P index recorded no new 52-week high and seven new lows, while the Nasdaq recorded four new highs and 32 new lows.