Stock Indexes Record Drop Due to COVID-19 Fears
Worries over the COVID-19 outbreak, commonly known as the coronavirus, have had a negative impact on economies worldwide, with the US stock market experiencing significant losses. The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 indexes are facing a challenging week, reminiscent of the 2008 financial crisis.
The Dow plunged by 530 points at the opening on Thursday morning. In the same timeframe, the S&P 500 plummeted by 1.9%, and the Nasdaq experienced a 2.1% drop. All three indexes slumped by 10% from their recent peaks, pushing them into correction territory, defined as a decline of at least 10% but less than 20%. While they haven’t dipped into bear market territory yet, the current situation is concerning.
BREAKING: Dow opens with over 500 points drop on Thursday due to ongoing coronavirus fears; Dow now down over 2,500 points for the week.
Latest update: https://t.co/7kR3VBfMfB pic.twitter.com/oJ6G5uhjeQ
— NBC News (@NBCNews) February 27, 2020
Earlier this week, President Donald Trump appointed Vice President Mike Pence to lead a task force addressing the potential US coronavirus outbreak. This decision has received criticism, particularly due to Pence’s handling of the 2015 HIV outbreak. With 82,000 confirmed cases of coronavirus globally and concerns about carriers spreading the disease unknowingly, the US Centers for Disease Control and Prevention anticipate a rise in US cases.
Companies like Microsoft are anticipating significant profit reductions for the first quarter of 2020. Some, like Goldman Sachs, are even suggesting that US companies might not generate any earnings this year.
Paul Hickey from Bespoke Investment Group expressed concerns to CNN, stating, “What’s even more troubling is that the current market fears are being driven by what could happen rather than what is actually happening.”
