(Bloomberg) -- Waves of selling in U.S. stock index futures triggered Chicago Mercantile Exchange limits that prevent declines from surpassing 5% from a closing reference price, as the spreading coronavirus rattled investors and crude oil plunged.E-mini futures on the S&P 500 Index sank 5% to 2,819 as of 8:05 p.m. in New York, hitting a limit triggered when the measure falls 5% from the price calculated in the last 30 seconds of trading Friday. The curb means the contract can’t trade at a lower price for the remainder of the overnight session, although transactions at or above the threshold are allowed.“It allows cooler heads to prevail,” JJ Kinahan, chief market strategist at TD Ameritrade, said by phone. “Particularly in the overnight sessions it’s a good thing to have because you just don’t have as many products at work. This is one rule that it’s been so long since we have seen it, but it’s proved effective over time.”Equities have whipsawed all week in trading as volatile as any time on record as investors assess the threat to the global economy from the spreading coronavirus. Concerted efforts from central banks and governments to soften the blow spurred gains earlier in the week, but the accelerating rise of reported cases raised the specter of a global recession and led to a powerful rally in Treasuries that sent yields to record lows.The last time futures selling tripped the limit down rule was the night of Nov. 8, 2016, as investors adjusted to news that Donald Trump would win the presidency. The price held at 5% below the prior day’s close around midnight and stayed there for about half an hour before turning higher. It erased the entire drop minutes after the opening of the regular trading.Nasdaq 100 futures will stop falling if the contract reaches 8,093.25, while the Dow contracts cannot trade below 24,534.The cash equities market is subject to circuit breakers established by the New York Stock Exchange in the wake of the 1987 Black Monday crash. Trading will halt for 15 minutes if the S&P 500 falls 7% to 2,764.3 at any time before 3:25 p.m. in New York. Another 15-minute pause will happen if losses in the index reaches 13%, a drop that would put it at 2,585.96. If the decline hits 20%, or 2,377.9, markets will close for the day. Only the 20% rule applies in the final 35 minutes of cash trading.\--With assistance from Elena Popina and Luke Kawa.To contact the reporters on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net;Lu Wang in New York at lwang8@bloomberg.netTo contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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