Dow tanks by 900 points amid California and New York 'stay at home' policy

Market confidence faded after the two largest economies in the U.S. curbed activity.

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By Lucy Bayly

Wall Street took a nosedive on Friday, wrapping up another tumultuous week for all three major averages, with the Dow Jones Industrial Average sinking by 916 points.

The Dow has now shed around 18 percent this week, completely erasing all the gains made since President Donald Trump took office.

The S&P 500 closed the day down 4.3 percent, capping its worst weekly performance since the financial crisis. The Nasdaq, which had started the day by hitting the "limit up" threshold in premarket trading, ended the day down by around 3.8 percent.

Trader optimism briefly mounted on Friday after California took a dramatic step to stem the spread of the coronavirus, implementing a mandatory "stay at home" order across the entire state. However, after New York State applied a similar statewide measure, investors were left to digest the financial implications of the two largest economies in the U.S.shutting down.

Increasingly bleak projections related to upcoming job losses also dampened sentiment, with Goldman Sachs analysts forecasting weekly jobless claims as high as 2 million, far higher than any weekly unemployment data on record.

The market sell-off comes despite drastic and coordinated action from central banks and governments across the world. The Federal Reserve announced this week it would extend its currency exchange program to other central banks as the demand for dollars intensifies, on top of a trillion-dollar injection of cash into the financial system and two emergency rate cuts.

Friday marked the last day that the main floor on the New York Stock Exchange would be open for trading, with a shift to all-electronic trading starting on Monday.