Fears surrounding the coronavirus outbreak wiped out trillions of dollars in market value
The Dow dove 1,193 points, or 4.4%, to 25,763. Fears surrounding the coronavirus outbreak wiped out trillions of dollars in market value. The S&P 500 confirmed its fastest correction in history as the rapid global spread of coronavirus intensified worries about economic growth.
The S&P 500 slid 2.4% as of 10:10 a.m.
The MSCI All-Country World Index fell 1.5 per cent to 532.55, reaching the lowest in four months on its sixth consecutive decline.
The indexes were set for their steepest weekly pullback since the global financial crisis, as new infections reported around the world surpassed those in mainland China.
Governments battling the spread shut schools, cancelled big events and stocked up on medical supplies.
In California, health officials say a new coronavirus case could be the first in the USA that has no known connection to travel overseas or another known case, a possible sign the virus is spreading in a community.
Despite those declines, the S&P is only down 7 percent since the start of the year and is now trading at levels seen last October. Germany is examining potential stimulus measures to stem the economic impact.
Investors were clearly not assuaged by President Donald Trump’s efforts to ease concerns about the spreading epidemic, which has now killed nearly 2,800 people around the world.
The Dow Jones Industrial Average tumbled almost 1,200 points Thursday, deepening a weeklong worldwide rout caused by growing anxiety that the coronavirus will wreak havoc on the global economy. The Nasdaq is down about 4.5 percent for the year.
All of the 11 S&P sectors were trading lower with technology, financials, energy and real estate sectors losing more than 1%. The best performers were the healthcare and industrials sectors, which all closed down more than 3 percent.
The NYSE Arca Airline index ended down 5.7 percent on fears about travel disruptions around the world, while the Philadelphia SE Semiconductor index, which includes China-exposed stocks, fell 4.7 percent.
Goldman Sachs was the latest to issue a warning on Thursday when it slashed its 2020 forecast for USA earnings, estimating that it now expects flat earnings in 2020 and lower growth in 2021.
Microsoft Corp dropped 2.6% after it warned of weakness in PC business due to a hit to its supply chain from the coronavirus, echoing similar statements from Apple Inc and HP. It gained about nine-tenths of a percentage point.
The S&P 500 recently traded at its most expensive level, relative to its expected earnings per share, since the dot-com bubble was deflating in 2002, according to FactSet.
At session lows, the Standard & Poor’s 500 and Nasdaq were down more than 10 per cent from their intraday record highs on February 19, while the Dow Jones Industrials was 10 per cent off its February 12 peak.