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Wall Street plunges on fears of coronavirus pandemic

Stock MarketsFeb 24, 2020 05:54PM ET
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© Reuters. Traders work on the floor at the NYSE in New York

By Sinéad Carew

New York (Reuters) - The S&P 500 and the Dow Jones Industrial Average on Monday suffered their biggest one-day percentage losses in two years after a surge in coronavirus cases outside China fanned worries about the global economic impact of a potential pandemic.

Investors sold riskier assets and rushed to traditionally safer bets such as gold and U.S. Treasuries after countries including Iran, Italy and South Korea reported a rise in virus cases over the weekend even as China eased curbs with no new cases reported in Beijing and other cities.

The benchmark S&P 500, which represents over 44% of the market capitalization of all global equities, lost $927 billion of its value on Monday alone and $1.33 trillion since its closing high on Wednesday last week, according to S&P Dow Jones Indices senior analyst Howard Silverblatt.

The S&P and the blue-chip Dow turned negative for the year to date and the Dow dropped more than 1,000 points on the day for only the third time in its history.

The technology-heavy Nasdaq fell 3.71%, the biggest daily percentage drop of the three major averages.

"We're not likely to make any progress higher until we have evidence the spread of the coronavirus is decelerating," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The Dow Jones Industrial Average fell 1,031.61 points, or 3.56%, to 27,960.8, the S&P 500 lost 111.86 points, or 3.35%, to 3,225.89 and the Nasdaq Composite dropped 355.31 points, or 3.71%, to 9,221.28.All of the 11 major S&P sectors closed in the red, led by the energy sector's 4.7% decline and followed by a 4.2% drop in technology stocks.

Apple Inc (NASDAQ:AAPL) slid 4.8% as data showed sales of smartphones in China tumbled by more than a third in January.

China-exposed chipmakers fell, with the Philadelphia SE Semiconductor index dropping 4.8%, while concerns about growing travel curbs dragged the NYSE Arca Airline Index down 6%.

Of the S&P's sectors, the defensive utilities, real estate and consumer staples indexes fell the least on the day.

Treasury yields fell to their lowest levels since 2016 as investors sought safety in government bonds, while the yield curve inversion between the 3-month and 10-year U.S. Treasuries deepened in what is often viewed as a recession predictor.

Adding to worries, Goldman Sachs (NYSE:GS) slashed its U.S. growth forecast on Sunday and predicted a more severe impact from the epidemic. [US/]

The CBOE Volatility Index, a gauge of investor anxiety, registered its biggest one-day jump since February 2018 and ended the day at 25.03, its highest closing level since January 2019.

"There was this underlying concern that was out there, and obviously over the weekend, it just escalated," said Stacey Gilbert, portfolio manager for derivatives at Glenmede Investment Management in Philadelphia.

After Monday's nosedive, the S&P closed almost 5% below its record closing high, achieved last week, while the Nasdaq ended 6% off its peak close and the Dow ended the day 5.4% below its record close.

(GRAPHIC: Coronavirus timeline - https://graphics.reuters.com/USA-STOCKS/0100B5FM3PJ/coronavirus-timeline.png)

The S&P 500 fell below its 50-day moving average and the Dow slipped below its 100-day moving average, all closely watched technical indicators.

Health insurers such as UnitedHealth Group Inc (NYSE:UNH) and Cigna Corp (NYSE:CI) dropped almost 8% after Senator Bernie Sanders, who backs the elimination of private health insurance, strengthened his position for the Democratic presidential nomination with a victory in the Nevada caucuses.

Janney Montgomery Scott's Luschini said that while the coronavirus was "by far and away the primary influence" for the market's decline on Monday, investors, he said, were "also beginning to handicap the odds of Sanders being the Democratic nominee."

In a rare bright spot, Gilead Sciences Inc (NASDAQ:GILD), whose antiviral remdesivir has shown promise in monkeys infected by a related coronavirus, rose 4.6%.

Declining issues outnumbered advancing ones on the NYSE by a 6.74-to-1 ratio; on Nasdaq, a 6.02-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and 23 new lows; the Nasdaq Composite recorded 21 new highs and 154 new lows.

On U.S. exchanges, 10.59 billion shares changed hands, compared with the 7.79 billion average for the last 20 sessions.

(GRAPHIC: S&P 500 industry sectors - https://fingfx.thomsonreuters.com/gfx/ce/7/8679/8660/Pasted%20Image.jpg)

Wall Street plunges on fears of coronavirus pandemic
 

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Comments (22)
Fred Smith
Fred Smith Feb 25, 2020 1:30PM ET
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Passing the Reuters bldg, there were several people wearing surgical masks. Has Reuters screened their employees?
Fred Smith
Fred Smith Feb 24, 2020 7:04PM ET
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My fund managers better be buy these stocks at discount rates like today..this is where you get big returns in "long term"
Fred Smith
Fred Smith Feb 24, 2020 7:03PM ET
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Not close to the top 20 % drops,,,
Chazlin Naidoo
Chazlin Naidoo Feb 24, 2020 6:41PM ET
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Who remembers these movies"Jamanji" or "Final Destination". The COVID19 resembles these movies, it's like a never-ending game. People experience things out of the world (like this Black Monday), people even die and it goes from country to country. The Jamanji movie ends where the game ends up on a Chinese coast line and 2 children end up with it...
Leo Putra Wijaya
Leo Putra Wijaya Feb 24, 2020 6:41PM ET
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its called jumanji and nobody was killed in that movie as far as i know
Chazlin Naidoo
Chazlin Naidoo Feb 24, 2020 6:41PM ET
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Jumanji can be considered as the "Black Monday" that has passed. Stock markets and Forex Markets showed many people drama, some scary stuff. Final Destination is the movie where you can't escape death. This movie is what I am referring to...
Chazlin Naidoo
Chazlin Naidoo Feb 24, 2020 5:48PM ET
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Investors invest in stock as the returns are good but during times like these, the nerves kick in and being human they won't risk losing so they move their investment to safe haven assets like gold etc even though the returns are not that good. If the virus spreads like flu in winter imagine how many people has it and is still spreading it by the second or minute and these people are still undetected. By the time the virus is detected in them, how many has already caught the virus before they get detected. Remember there is no cure for flu, the COVID19 can only be cured if detected in the early stage. The world is in trouble good people. Only by the Grace of God will this virus end we need to start praying. This thing of the rich is getting richer reached its peak, the poor gets neglected by governments thus eats anything to survive, they get sick, a virus spreads quickly and not only affects the rich (investors, wall street crooks etc) but the entire world. The poor rocks the world!!
David Ploski
David Ploski Feb 24, 2020 5:42PM ET
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forex today is crazy I never see something like that
Akshay Batavia
Akshay Batavia Feb 24, 2020 4:22PM ET
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Black Monday, more pain are ahed, this is a bigning of the show. world-wide economy shattered. China is a almost to finish & worst effected. they had a prepare own their coffin by producing virus.
gaurav chawla
gaurav chawla Feb 24, 2020 1:22PM ET
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march series
gaurav chawla
gaurav chawla Feb 24, 2020 1:22PM ET
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nasdaq will go to 9550 again
Sal Tecce
Sal Tecce Feb 24, 2020 1:18PM ET
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this the insanity of the stock market.panic,panic,panic
Sudarshan Live
Sudarshan Live Feb 24, 2020 1:09PM ET
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200 points reversal possible at 27950 zone
Sun Moon
Sun Moon Feb 24, 2020 1:04PM ET
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Shows just how unprepared we are for a pandemic.
NYSE NASDAQ
NYSE NASDAQ Feb 24, 2020 1:04PM ET
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that shows how our technology is rubbish
NYSE NASDAQ
NYSE NASDAQ Feb 24, 2020 1:04PM ET
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we cant find vaccine , so many universities, so many companies and cant find vaccine
Mel Johnson
Mel Johnson Feb 24, 2020 1:00PM ET
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what is a good program to start trading with currency?
Dushyant Sharma
Dushyant Sharma Feb 24, 2020 12:42PM ET
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Good ... I m from India ... I want to invest in American market??
RvR Ventures
RvRventures Feb 24, 2020 12:26PM ET
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XAUUSD 1700?
Aleksandrs Bernsteins
Aleksandrs Bernsteins Feb 24, 2020 11:22AM ET
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just wait what is going to happen tomorrow
Paulina Turnover
Paulina Turnover Feb 24, 2020 10:40AM ET
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I'm buying the dip in MSFT and CRM. If you aren't, then write down their current prices and have a look again in a couple months, that will save me from having to say "told ya so"   ;-)
Marec Huber
Marec Huber Feb 24, 2020 10:40AM ET
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Maybe better wait first, dont you think ?This market may have ways down to go yet, and if so ,you could have bought it for even less.We will see ?
Paulina Turnover
Paulina Turnover Feb 24, 2020 10:40AM ET
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Marec Huber   In a bear market you can buy a stock when it's down 5, 10, and 15% and you average a 10% discount, but if you wait throughout the dip for 20%, you have nothing.
Jack Drummond
Jack Drummond Feb 24, 2020 9:41AM ET
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Shoulda "bought the dip" in gold. Somebody I know did just that, and boy am I happy.
Tumelo Mash
Tumelo Mash Feb 24, 2020 9:00AM ET
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Buy the Dip. This is only temporary... Think about yes it's spreading but China is Keeping it at bay and adding stimulus to the economy and other Countries like South Korea are also doing the same necessary measures that China did a couple of weeks back... The cases and Deaths will peak and this is why I suggest buy the Dip but not in futures buy the Dip in stocks like Apple and Nvidia.... Nasdaq we will buy that when the panic calms.
Robert Schoen
Robert Schoen Feb 24, 2020 9:00AM ET
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Stimulus is going to do nothing about the supply chain issue.
Abdelraziq Abuaisha
Abdelraziq Abuaisha Feb 24, 2020 9:00AM ET
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There is no dip to buy my dear, looks like an endless short.
Dimitri Drobiazko
Dimitri Drobiazko Feb 24, 2020 9:00AM ET
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China is keeping it at bay as long as people sit inside their homes with welded doors.Let them out, you'll see Wuhan-2
Joel Zepeda
Joel Zepeda Feb 24, 2020 9:00AM ET
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I have a question is it temporarly or because of the spread of the coronavirus or is it something else?
ATOMIQ ILYA
ATOMIQ ILYA Feb 24, 2020 9:00AM ET
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Yes
vincent li
vincent li Feb 24, 2020 8:42AM ET
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many got burned buying the uptrend...so painful
John Klan
John Klan Feb 24, 2020 8:42AM ET
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most just got rich. If they sold everything today they would still be rich.
Edward Chong
Edward Chong Feb 24, 2020 8:42AM ET
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its up for so long. the gains easily offset the losses. mkt cannot go 1 straight line.
David Knight
David Knight Feb 24, 2020 8:41AM ET
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nice open boarder policy europe. 🤢🤮🤮
vincent li
vincent li Feb 24, 2020 8:37AM ET
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i did say.. musical chairs..so funny why traders love to push the limites....crazi...lol
 
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