LEXINGTON, Ky. — It was another brutal day on Wall Street as the Dow drops nearly 13%.
As the number of COVID-19 cases are on the rise, the stock market is on the decline.
“We’re seeing a lot of uncertainty right now,” Dr. Chris Bollinger, a University of Kentucky economist, said.
Monday, as the market took another major blow, it required another reset called a Circuit Breaker. Those are 15 minute halts in trading, used to try to stabilize the market.
There are several triggers -- first at a 7% drop and then at a 13% drop. If a drop reaches 20%, trading is shut down for the day.
“In order to prevent that complete unraveling,” Bollinger said.
Circuit Breakers were created in 1987, after what became known as Black Monday when the Dow dropped 22%.
Before this coronavirus scare, the last time trading had to be halted was over 20 years ago in 1997.
Bollinger warns that we should brace for a recession.
The good news is, Bollinger said, expectations are that “it won’t be very long and it won’t be very deep.”
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