U.S. Stock Market Suffers Brutally as Dow Drops to Historic Low Amid Coronavirus Fears
The coronavirus may not infect all, but it may affect all financially.
The stock market saw a massive drop on Thursday, just two days after officials urged Americans to start preparing for a bigger outbreak of the coronavirus in the United States.
Fears sparked by the recent disease outbreak caused the Dow Jones Industrial Average to decline by 1,190.95 points (4.4 percent) and close at 25,766.64, while the S&P 500 index, which measures the stock performance of the top 500 companies in the U.S., fell by 4.4 percent to 2,978.76, according to CNBC.
The Nasdaq Composite also dropped by 4.6 percent to 8,566.48, the outlet reported.
In addition to the significant declines, history was made on Thursday, as the Dow marked its biggest one-day point drop to ever be recorded, according to the outlet. Similarly, the Nasdaq saw its biggest one-day point decline since August 2011.
The Dow and S&P 500 also experienced their worst day for stocks since February 2018, with the S&P closing below 3,000 for the first time since October, CNBC reported.
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Following the drops, Ascent Private Capital Management’s global investment strategist Tom Hainlin reportedly said that because the virus-related decline is unprecedented, they’re treating it with immense caution.
“We’re extremely cautious in the short term,” Hainlin explained, according to CNBC. “No one really seems to be an expert on the coronavirus. We haven’t seen anything like this really in our investing lifetimes.”
Other experts — including Goldman Sachs chief U.S. equity strategist David Kostin and Former Federal Reserve Chair Janet Yellen, and head of U.S. rates trading at AmeriVet Securities Gregory Faranello — also spoke out about the coronavirus epidemic and its inevitable effect on the U.S. economy.
“We’ve hit a pocket of fear,” Faranello told CNBC. “We could be in trouble because, let’s face it, the U.S. consumer is what’s holding this thing together.”
“U.S. companies will generate no earnings growth in 2020,” Kostin wrote in a note to the firm’s clients on Thursday obtained by NBC News. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”
“It is just conceivable that it could throw the United States into a recession,” Yellen said Wednesday, according to the outlet.
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On Tuesday, the Centers for Disease Control urged Americans to start preparing for a bigger outbreak in the U.S. “in the expectation that this could be bad,” said Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases at the CDC.
“It’s not so much of a question of if this will happen in this country anymore but a question of when this will happen,” Messonnier said.
The sudden urgency, after weeks of emphasizing that the risk to the average American is “low,” came from the abrupt spread of the new coronavirus, officially termed COVID-19, in countries outside of China.
Last weekend, cases of coronavirus soared in Italy (283 cases and seven deaths), South Korea (977 cases and 10 deaths) and Iran (95 cases and 16 deaths). Austria and Croatia also said they’ve seen their first cases.
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Currently, the U.S. has 53 confirmed cases of coronavirus. Of those, 12 cases occurred in people who recently returned from trips to China before news of the outbreak spread and two cases were from their close contacts.
The other 39 cases are in people who were repatriated by the State Department back to the U.S., either in one of the three chartered flights of Americans who had been living in China, or from the Diamond Princess cruise ship that had been quarantined in Yokohama, Japan.
On Wednesday night, President Donald Trump said Vice President Mike Pence will be leading the federal government’s response to the coronavirus outbreak. They plan to ask Congress for additional funding to prevent the disease from spreading.
