Name: Coronavirus fear and plunging oil price send stock markets reeling
Uploaded: 2020-03-12T23:23:32.000Z
Duration: 6 min 19 s
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This is an ABC News Special Report reporting George Stephanopoulos.

Breaking news from Wall Street In the wake of the Corona virus crisis, stocks have stopped trading on Wall Street after a 7% drop in the Dow, Jones and the S and P 500 in the first minutes of trading this morning.

Want to go to Rebecca Jarvis on the New York Stock Exchange this morning?

The falls we've seen over the last couple of weeks is the Corona virus.

Crack crisis expands and is exacerbated by an oil war oil price war sparked between Saudi Arabia and Russia.

And what we've seen this morning is now a halt.

The circuit wires, as they're called these air like trip wires for the market to keep things from going into free fall were tripped up within the first few minutes of trading here at the New York Stock Exchange, stocks falling 7% just out of the gate this morning on those fears about the Corona virus and even larger than that over the weekend.

This new price war, as Faras oil is concerned.

Saudi Arabia with OPEC had a meeting over the weekend to try to address the falling oil prices in light of the Corona virus.

Those talks were meant to be supportive of oil to keep it from falling further.

But instead Saudi Arabia walked away from the meetings, cut prices, instigating a price war specifically with Russia and that price war is now weighing on US oil prices.

That is the biggest fall for oil prices here in the U.

And the concern is now for oil companies as well.

The companies that employ 6.7 million Americans, they have a lot of debt, George.

And as that debt comes do particularly in a situation like this, it puts a lot of those companies potentially at risk.

George Rebecca, Let's walk through what's gonna happen today.

Once the 7% drop was noted about in the S and P 500 trading will stop for about 50 minutes.

The Dow is also lower today, more than 1800 points lower, but the trip wires and are enacted.

Those circuit breakers are enacted based off of the S and P 500 behavior.

So when the market reopens within 15 minutes, the halt last for 15 minutes.

When that market reopens, the next trip wire will be the S and P 500 down approximately 13%.

If it falls 13% the markets will halt again for another 15 minutes.

And if the market were to fall 20% then trading would be halted for the rest of the day.

This is all sparked also by fears of a global recession that has been sparked by the by the Corona virus crisis.

See, China manufacturing basically shut down over the weekend, Italy locked down the northern part of their country, which is the Heartland of their economy as well.

The biggest question for Wall Street coming into this morning was about the virus itself.

So much of what Wall Street trades off of is uncertainty, and we have so much uncertainty surrounding the virus.

And what we've seen now is that the first wave of this happened in China.

All of the Chinese manufacturing that was shut down hit companies large and small.

Some of the bigger companies that warned that manufacturing there being shut down because of the Corona virus would impact their results.

But we've also heard from countless numbers off small businesses that also manufacture products there.

They haven't been able to get those products then.

The second wave of this is as the disease comes here to the United States and spreads and has issues for US businesses.

We've heard from so many companies who have told their employees to stay home.

We've also heard from so many companies that have canceled conferences, major events here in the United States.

All of these things have a ripple effect, and what economists look at with that ripple effect is how significant will it be?

Will it be enough to slow the economy down to something like a recession and that is the biggest question for Wall Street right now.

How significant will this slowdown be, George?

We're here with Dr Jan Ashton as well, and any Rebecca said it right.

There's so much uncertainty surrounding this virus.

But what we know right now, it is spreading in United States.

We should expect more communitywide measures, 100%.

And we have to go back to the testing process, George.

And we've said it before as we ramp that up and as we test more people, there will be more known cases.

When Rebecca talks about uncertainty in the financial and economic world in the medical and scientific world, uncertainty is also a big concern.

We have to put this into timeline historical context.

No one has a crystal ball in terms of the clinical manifestations and impact that it will have here.

So in the United States, we look to Europe.

We look to other parts of the world to see how people are faring clinically.

How many people are showing up in hospitals and then you look to the trickle down effect on social distancing measures and how that is effective not just in protecting vulnerable populations like the elderly or those with pre existing medical conditions, but if it buys us time and when you talk about curves, not just financial ones in epidemiology in medicine, we're hearing a term flattened that curve.

That means reduced the number of people exposed, infected and sick.

And that is important not just clinically to protect people's health, but to give us time to get our ducks in a row.

But bottom line, the impact of this crisis basically has just begun.

We'll go back to our regular program right now.

For many of you, that is Good Morning America.

 Coverage of this story continues on ABC News Live as well. 

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Coronavirus fear and plunging oil price send stock markets reeling

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