CORONAVIRUS

Markets fall sharply, volatility takes hold

Traders at the New York Stock Exchange work as the market closes on Wednesday. (Associated Press)
Traders at the New York Stock Exchange work as the market closes on Wednesday. (Associated Press)

Investors unleashed their coronavirus fears Wednesday, sending U.S. markets into a tailspin.

Nearly every asset class — stocks, bonds, gold, oil — came under siege as investors fled to the safety of cash.

The weeks-long panic has hollowed out a big chunk of the stock gains from the bull market and erased virtually all of the equity advances the past few years.

Nothing was spared. Oil prices looked like they were reliving the 1970s, dropping 24 percent to near $20 per barrel for the commodity’s third-biggest rout in history.

All 11 Standard & Poor’s sectors were in the red.

The day’s poorest performers were in the travel and tourism sphere. Marriott closed down 34 percent. United Airlines, 33 percent. MGM Resorts, 30 percent. Alaska Air, 32 percent.

“The lamps are going out all across the economy,” JPMorgan Chase said in a report that forecasts a massive, 14 percent decline in gross domestic product in the second quarter.

Boeing, once the showcase of the bull market, saw its stock drop below $100 per share, a quarter of its peak a year ago. President Trump has pledged federal aid for the wheezing aerospace giant.

“If 2008 was the Great Financial Crisis, this is the Great Virus Crisis,” said Ed Yardeni, president of Yardeni Research. “It’s all at once a health crisis, financial crisis and economic crisis.

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“We need to fix the health part of it before we have it solved, but we can take financial and fiscal steps to blunt its effects. We are starting to do that now.”

All three major U.S. stock indexes are in a correction, having declined well over 20 percent from their highs.

The Dow Jones industrial average fell nearly 1,300 points, about 6.3 percent. The blue-chip index plunged 2,300 at the bottom of its day.

The Standard & Poor’s 500 index, which Thursday will mark one month since its all-time high, fell nearly 5.2 percent.

The broad index triggered a halt in trading earlier in the day after a 7 percent decline.

After trading resumed, markets plunged as White House plans to bail out embattled industries and cut checks to Americans failed to quell investor fears about the devastating economic impact of the coronavirus.

The tech-heavy Nasdaq sank 4.7 percent.

Investor Bill Ackman didn’t help. In a telephone interview with CNBC Wednesday afternoon, Ackman proclaimed “America will end as we know it” if the crisis is not resolved. Markets dropped even more after his emotional pleas.

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