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* Energy stocks plummet as oil slumps 22%
* Bank stocks slide as Treasury yields hit new lows
* UK's Aon slips after deal to buy Willis for nearly $30 bln
* Futures off: Dow 4.87%, S&P 4.89%, Nasdaq 4.82%
(Updates prices, adds details)
By Medha Singh and Sanjana Shivdas
March 9 (Reuters) - U.S. stock markets were set to tumble on
Monday, with the Dow Jones index on track for its biggest
opening plunge this year, as global recession fears were
amplified by the rapid spread of the coronavirus and a 22% slump
in oil prices.
Stock index futures fell 5% overnight to their daily trading
limit as Saudi Arabia stunned markets with plans to raise oil
production significantly after OPEC's supply cut agreement with
Russia collapsed. O/R
Crude oil logged its worst day in almost three decades,
sending oil majors Chevron Corp CVX.N and Exxon Mobil Corp
XOM.N down about 15%. All 30 components of the blue-chip Dow
were in the red in premarket trading.
"It's probably a net negative for the world economy that oil
prices have fallen," said Simon MacAdam, global economist at
Capital Economics in London.
A dip in oil prices is generally considered positive for
global growth, but concerns about the economic damage from the
virus outbreak have sparked a worldwide sell-off that has erased
about $3.5 trillion from the value of companies listed on the
benchmark S&P 500 .SPX . MKTS/GLOB
"You will now have pain on oil producers and on investment,
and you won't have an uptick in consumer spending because they
aren't comfortable because of the virus concerns," MacAdam said.
The outbreak has now infected more than 110,000 people
globally, triggered a lockdown in northern Italy, crippled
supply chains and prompted cuts to global growth forecasts.
The number of confirmed U.S. cases of coronavirus rose to
nearly 550 on Sunday. "Our baseline expectation is of a mild recession and this
(the coronavirus and oil price crash) is a reality check, which
is allowing investors to reassess the situation," said Bas van
Geffen, an analyst at Rabobank in Amsterdam.
Traders are now expecting the U.S. Federal Reserve to cut
interest rates next week after an emergency reduction on March
3.
The yield on the benchmark 10-year U.S. Treasury US10YT=RR
was on course for its biggest one-day fall in almost a decade,
sending shares of rate-sensitive U.S. banks including Citigroup
Inc C.N , Bank of America Corp BAC.N and JPMorgan Chase & Co
JPM.N down between 9% and 12%. US/
Marathon Oil Corp MRO.N , Devon Energy Corp DVN.N , Apache
Corp APA.N , Pioneer Natural Resources Co PXD.N fell between
25% and 34% and were some of the biggest decliners among the S&P
500 components trading before the bell.
At 8:58 a.m. ET, Dow e-minis 1YMcv1 were down 1,255
points, or 4.87%. S&P 500 e-minis EScv1 were down 145 points,
or 4.89% and Nasdaq 100 e-minis NQcv1 were down 410 points, or
4.82%.
In news-driven moves, Willis Towers Watson WLTW.O rose
1.2% after UK-based insurance broker Aon Plc AON.N said it
would buy the company for nearly $30 billion in an all-stock
deal. U.S.-listed shares of Aon fell 11%.