Dow enters bear market, losing 20 per cent from recent peak, gripped by coronavirus fears
- The Standard & Poor’s 500 index fell 141 points, or 4.9 per cent, and the Nasdaq composite lost nearly 400 points, or 4.7 per cent
- Markets await US President Donald Trump’s stimulus plan to combat the Covid-19 pandemic
The Dow Jones Industrial Average slipped into bear-market territory on Wednesday after dropping 1,467 points in a continued extreme market swing as confirmed coronavirus cases in the United States exceeded 1,000.
Fuelled by fear tied to the outbreak, which the World Health Organisation (WHO) is now calling a pandemic, the index of 30 bellwether stocks lost 20 per cent from its mid-February peak of 29,551, officially entering a bear market.
The Standard & Poor’s 500 index was down 140 points, or 4.9 per cent, and the Nasdaq composite sank nearly 400 points, or 4.7 per cent.
Wednesday’s correction followed a market swoon on Monday that saw the Dow close down more than 2,000 points in its largest point drop ever for a single day as oil prices tumbled and the virus continued to spread outside China, where it was first reported in December.
“The situation is likely to get worse before the epidemic blows over,” said James McDonald of Los Angeles, California-based Hercules Investments.
Any market rebound in the coming week, he added, would be considered as “technical in nature as the market fully accounts [for] the loss of economic potential from this exogenous shock”.