Dow closes down 1,000 points as coronavirus fears slam Wall Street
Category: Stock Market & Investments
Via: perrie-halpern • 4 years ago • 30 commentsBy: Martha C. White and Lucy Bayly
S E E D E D C O N T E N T
Wall Street was rocked in a volatile trading session Monday that ended with the Dow Jones Industrial Average closing down 1,031 points — the worst day in two years for the blue-chip index — as fears increased over the global economic shock of coronavirus.
The market sell-off came amid a significant uptick in reported cases of the disease in Europe , pushing investors to ditch stocks and buy up safe-haven assets like gold, which hit a seven-year high.
The virus has already stalled the travel industry and shuttered factories in several countries, and it has slammed luxury goods retailers, casino operators and tech companies. Monday's market response represented concern that stricter methods to control the spread of the virus would further throttle supply chains — and that the virus is getting closer to home.
Investor reaction to the wider spread of coronavirus led to a volume of trading so heavy that some clients even had difficulty accessing their accounts Monday , CNBC reported.
The disease has already choked Chinese production, bringing the world's second-largest economy to a standstill. After the outbreak spread to parts of northern Italy , officials took severe measures to contain the virus, including staffing borders and setting up checkpoints. At least 10 towns in northern Italy were locked down. Some suspended all public events and gatherings, and others also shut down schools, nurseries, museums and public offices.
Milan, the country's financial center, could also be hit hard. The Borsa Italiana, Italy's stock exchange, slid by 6 percent, its worst day in almost four years.
Monday's market sell-off came as South Korea raised the country's coronavirus alert to its highest level and Italy saw 229 new cases of the disease . While the World Health Organization stopped short of calling the outbreak a pandemic , it did say Monday that the virus has "unlimited potential."
Scientists say that the new virus, dubbed COVID-19, is both more easily transmitted and less deadly than the SARS epidemic of 2002-04 but that much still remains unknown. As a result, said Ian Shepherdson, chief economist at Pantheon Macroeconomics, "markets are now slaves to the news flow."
Schwab public relations told CNBC: "Due to higher-than-usual volumes, some clients may have experienced delays in accessing some online features as the market opened but our systems are fine and up and running." Fidelity, the largest online broker, said, "Some clients are experiencing technical issues and we are working as quickly as possible to resolve."
The rate at which the virus was spreading in China appears to be slowing. An announcement of 409 new cases Monday was the fifth day in a row that the number of new daily cases had fallen below 1,000. Outside China, however, a spate of outbreaks presented new cause for concern.
"The spike in infections in South Korea, mostly concentrated in the congregation of a single church, a surge in cases in Italy, and news of an outbreak in Iran, where the health care system is of uncertain quality and the government is secretive, has triggered fears that China's aggressive quarantining efforts won't keep the virus from spreading globally," Shepherdson wrote in a client note.
Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said: "Global growth is likely to be impacted in a meaningful way due to fears of the coronavirus."
The challenge investors face is that no one knows how long this epidemic will last, nor how dangerous it ultimately will be to populations.
Coronavirus has struck at a time when major economies, including Japan, Germany, India and Hong Kong, are facing a downturn due to other factors, such as the U.S.-China trade dispute and political protesters.
"Stock markets around the world are beginning to price in what bond markets have been telling us for weeks," Zaccarelli said.
"Bond yields have continued to move lower, despite the fact that stocks quickly shrugged off the coronavirus risks last month," he said, adding that this indicated that the stock market's initial resilience was unlikely to last.
Nigel Green, CEO and founder of the deVere Group, predicted that markets could fall by as much as 10 percent — a possibility he said most investors are not yet pricing into valuations.
"Many investors remain complacent about the far-reaching impact of coronavirus, which is continuing to spread — and a faster pace. This will inevitably hit financial markets," he wrote in a note. "In general terms, stocks have hardly been deterred by the coronavirus outbreak. This complacency is concerning."
Green added that the virus was emerging as many key global economies were already vulnerable.
"Coronavirus has struck at a time when major economies, including Japan, Germany, India and Hong Kong are facing a downturn due to other factors, such as the U.S.-China trade dispute and political protesters, which could hit the world economy," he said.
Zaccarelli said, "This threat to global growth is real and should not be ignored." But he added that — provided the U.S. stays out of recession — the virus' impact will be unlikely to hurt the retirement goals of long-term investors.
"We will move past this challenge, and the economic expansion will continue in 2020," he said.
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It wasn't MY fault.
I hope you're staying safe over there. Seems like this might be a good time to take a long Canadian Vacation (if that's even possible at this point).
Thanks for caring - We're okay here - pretty far from Wuhan but staying home. Looking outside, it looks like a scene from a dystopian movie - nobody there.
According to Rush Limbaugh, it's a conspiracy to make Trump look bad. Rush is trying to claim it's just the common cold.
Sigh. Refusing to acknowledge the threat means failing to take any steps to prevent an epidemic here in the States. 2% mortality rate doesn't seem that bad until you think about how rapidly this is spreading - that's still a lot of deaths.
Hope you stay safe.
Chucky Schumer never met a crisis that he wouldn't attempt to take political advantage of. From the article on MSN.com
"All of the warning lights are flashing bright red," Schumer said on the Senate floor. "We are staring down a potential pandemic, and the administration has no plan. We have a crisis of coronavirus, and President Trump has no plan, no urgency, no understanding of the facts or how to coordinate a response."
Chuck is pissed because he thinks Trump didn't ask for enough money. Do have a link to where Limbaugh said that?
Schumer is correct. Maybe you've forgotten that it's the government's job to promote public health and safety - and having a plan for how to deal with this is important. Trump DOES have no understanding of the facts, as he's made clear. He disdains experts and refuses to accept any facts which he thinks will make him look bad. He's spreading misinformation about a vaccine, about all kinds of things - and he cannot be trusted to actually do what's best for us. His worshippers love that he hates facts and experts ... if it kills them or destroys their retirement savings, I wonder if they'll still love it? Probably ... they're totally brainwashed.
Just like the idiotic hurricane forecast, which he had a fit about. People's safety actually depends on this asshole, but all he cares about is his ego.
As to Limbaugh - he's also spreading the debunked conspiracy theory about China doing this on purpose. The man is a blowhard and an idiot.
Your post is patently partisan and [deleted]
So you are denying that Limbaugh said what he absolutely said? You are denying that Trump has openly said he doesn't trust experts and goes only by his gut - even though that's one of the things his toadies worship about him? Have you bothered to read what he's said about the coronavirus - and do you have enough intelligence to understand why it's incorrect? Do you realize that it IS the government's job to plan for and manage this type of thing?
And you accuse ME of reading fake news? Hilarious. Keep it up, [deleted.] Let's hope it doesn't kill you, but go on believing Trump's lies. I wonder who at the CDC will get fired now for telling the truth, in contrast to Trump's lies. Dow down another 900 today after 1000 yesterday.
Your post is an outright lie. Too bad it can't be reported for that.
From the Washington Times, which leans right. And here's the video of him saying it:
Is there no limit to the blatant lies we hear from Trump toadies? They lie even when the truth is on video. Shameful.
What do you expect from someone who thinks wind turbines cause cancer.
Thanks. We're being VERY careful.
So apparently they've given this coronavirus a name "2019 novel coronavirus (2019-nCoV)" and the disease it causes "COVID-19". I read that the death rate for novel appears to be lower than SARs but because novel spreads more easily the actual death toll may be much higher. I also read that most of the people who have died from 2019-nCoV at this point were older than 60 and/or had pre-existing conditions.
This seems like a weird thing to have a market sell-off over. I feel like there has to be more going on, like simple profit-taking in response to a minor sell-off.
Coronavirus sucks, but influenza still infects and kills way more people, yet it doesn't prompt panics of economic collapse. They talk about Coronavirus infections in the tens of thousands. Influenza has infected millions of people just this year.
Yes, the flu kills more people every year but it's more spread out whereas the corona virus is concentrated in a larger industrial area in China. People aren't going to work and production is down. When there are no goods to sell the market suffers
I heard on the news that people didn't want to go back to work. The Army will force them at the point of a gun
Not at all. It's most likely an emotional reaction to fear of how this will impact the global economy. I don't know any investor who would admit to reacting emotionally, but many do. People probably remember reading about the Spanish Influenza and other pandemics. and the uncertainty of what could happen is driving this.
It's not shutting down factories, entire cities, resulting in major quarantines ... the heads of medical departments aren't dying from it ... and there is a vaccination.
I can't speak to that level of specificity, but coronavirus has killed over 2,000 people while the flu has killed over 14,000 in spite of that vaccination being available. Granted, the death rate is higher for coronavirus, but I find it weird that people freak out over it like it's the Black Death but ignore the flu. And they are working on a vaccine. Supposedly they expect it to be out sometime in the next few months.
Down another 700 today.
These days, I find it funny when I see headlines like " Wall Street Rocked with Sell off " !
As high as the markets have gone over the last 3 years, The "Uber Stock playing People" have only lost from the " Profits " they've already made.
Same with the folks that just have 401K's, but don't input anything Yea or Nay on where it goes to make money. They just lost some "Profit" they already made. Nothing more, nothing less !
Big Deal.