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Major averages fall double digits as coronavirus concerns intensify — what to watch now

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S&P 500 fell more than 11% on coronavirus fears—Five experts on what to watch

Coronavirus concerns aren't letting up.

U.S. stocks plunged sharply in Monday trading as fears around the fast-spreading virus intensified, with all three major averages dropping by double digits into the close. The Nasdaq Composite index had its worst day ever while the Dow Jones Industrial Average had its worst day since the 1987 "Black Monday" market crash.

Wall Street commentators were closely watching the market's moves.

Here's what five of them, including CNBC's Jim Cramer, said about the action:

How to approach buying stocks

Cramer, host of "Mad Money," suggested investors separate the "essential" from the nonessential when it came to picking stocks:

"When I'm looking at companies that, say, if they go down a great deal … you still need their product, that's an opportunity. Let's take Verizon because it's neutral. Do I think that Verizon's a buy? At a certain level, yes, because they're in the mix of things that you have to have. Do I think that certain department stores are essential? No. Do I think casinos are essential? No. Do I think Carnival Cruise is essential? No. They may want to be able to keep these companies alive, but I don't think that means they want to insure the common stocks. I don't hear anything about that. … Your first check down is to look for companies that have a lot of cash that are going to be needed after the illness is conquered. Your second one is to say, 'Alright, what companies have good dividends that have decent cash flow that I think can get through this?' And then your third one is to say, 'I don't want any of these companies because they could be cash-strapped.' And there, you're thinking about some retailers, restaurants, airlines, travel, leisure, hotels. Those are very hard to reconcile."

A 'disappointing' response

Ronald Temple, managing director, co-head of multi-asset and head of U.S. equity at Lazard Asset Management, said he was "disappointed" by the federal government's response thus far:

"The Fed can't solve the coronavirus, and that really requires the federal government to basically be on the front foot. And what's disappointing to me so far is, frankly, even the bipartisan compromise legislation that passed the House on Friday night has giant loopholes. One of the key intentions of the legislation was to make sure that people who are sick don't go to work and infect other people, but the legislation allows exemptions for any company with over 500 employees and allows for an application for hardship exemptions for any company with under 50 employees. Well, that's 80% of Americans working in those companies, which effectively means you're making people choose between putting food on the table or potentially spreading an infection. And if I look at the press conference on Friday at 3:30 from the White House, what was disappointing there is it quickly became apparent that the website for a national database that supposedly was being worked on by Google wasn't accurately portrayed. And, also, it's great that these companies are offering capacity in their parking lots for testing, but it also still isn't clear who's going to be responsible to roll out that testing and when it will be available. So, I think what we've realized is the federal government has either been not aware of the situation or has been too focused on politics to make people aware, and this is really important. For people to understand the importance of social distancing, they have to be told the truth and they have to understand these issues around ICU capacity and effectiveness. And I worry that we've had two months that have largely been wasted in terms of communicating that message."

'Get money in people's pockets'

Paul McCulley, senior fellow at Cornell Law School and former chief economist of Pimco, said that "the Fed categorically did the right thing" in throwing "a mosaic of everything they had" at the problem, but that wasn't what had investors concerned:

"The equity market is actually discounting the uncertainty — though they know the direction — on the economy. So, I don't think there's any sort of indictment from the equity market of what the Fed did. The equity market is looking at the real world, and the real world is going to require a lot bigger response than just the Fed doing everything they can. It's going to take a fiscal policy response to literally get money in people's pockets. That is the bottom line. The Fed can get money into Wall Street's ... system and they're doing it with alacrity, but the bottom line is we need to get money, hard, cold money, in real Americans' pockets, particularly the most vulnerable amongst us."

Return of the bull

Ricky Sandler, founder, chief investment officer and CEO of Eminence Capital, struck a notably bullish tone about the market's recovery:

"If you really want to be really bullish, what you will soon realize, I think, is that everybody can plan the second half of the year. They understand that this will be behind us. They understand business levels will be back. We will have pent-up demand. We will have massive fiscal stimulus. We will have lowered interest rates and lower oil. I would argue business and the market could make new highs from that. Now, against the backdrop of that, you have tons of stocks down 50% that are really good companies. So, this is an opportunity. My message to your viewers is refinance your mortgage and take the money and buy some stocks."

Businesses at risk

Janelle Woodward, head of fixed income at BMO Global Asset Management, pushed for more of a fiscal cushion for businesses:

"I think that coordination is important and I think … it's not just about global central banks continuing to step in. It is also about that fiscal piece. And I think what needs to be appreciated and what's different is that this is the first time we've been through a crisis where we have the regulatory constraints on bank balance sheets. And so I think as a first-order effect, we need to be able to figure out how we can support banks and lending and extending credit. Again, the solvency isn't about banks themselves, which is what we saw during the financial crisis, but that next layer down, and so the Fed can support that, but we actually need tools to directly reach the businesses that are most at risk."

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