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Stocks set to extend losses despite further central bank support

U.S. stocks were poised for further losses Thursday even as the Federal Reserve and the European Central Bank both rolled out fresh measures to support financial markets late Wednesday as the coronavirus pandemic escalates. 

Futures for the Dow Jones industrial average slumped 400 points, a day after it tumbled more than 1,300, nearly erasing all of its gains since President Donald Trump took office. Standard & Poor’s 500 futures fell 2%. 

Even prices for longer-term U.S. Treasurys, which are seen as some of the safest possible investments, fell as investors sold what they could to raise cash. That pushed the yield on the 10-year Treasury, which moves in the opposite direction of prices, sharply higher, to 1.19%. It had recently dropped below 1% for the first time ever. 

The Fed says it will establish an emergency lending facility to help unclog a short-term credit market that has been disrupted by the virus’s spread. The European Central Bank, meanwhile, launched a new, expanded program to buy financial assets in a bid to calm markets.

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