Yesterday, the bad news is that there were thousands of people on Long Island suspected of being infected by the virus. Today it was California that reported the first case of unknown origin, though how they can know that is anyone’s guess. How can they possibly know that a victim has not been in contact with someone from the many different countries that have been impacted?  Or for that matter in contact with someone who has been in contact with someone from one of these countries?  However you slice it, this was taken as another turning point in the crisis and the Dow had its greatest one-day plunge in history, down nearly 1200 points.  This was also the fourth 1,000 point decline in history and, worse than that, the second in just this week.  All three indexes are now officially in correction, the fastest one in history. 

The Dow is 12.8% below its February 8^th record, the Nasdaq 12.7% below its February 19^th record, and the S&P 12% below its February 19^th record, all on the highest volume in six years at over 15.6 billion shares traded.  Today’s expert says, “People have gone from saying this is a non-event to saying this is the end of the world. There’s room for a middle ground.  The virus will spread somewhat but it doesn’t mean that it’ll make the entire world grind to a halt.”  Once again, I think such comments are entirely premature.  If indeed the world does not “grind to a halt,” if the virus only spreads “somewhat,” then this will ultimately qualify as a non-event.  If this virus is successfully contained, then all will return to normal, albeit with a few bruises.  If it is not contained, then the balances in our portfolios will be the least of our concerns.  My guess is that we still have quite a ways to go for either outcome and, of course, history tells us that the former is most likely to be the case.  Stay tuned.

Thu  FEBRUARY 27, 2020 / 5:24 pm 

Pandemic fears send investors running as Wall Street confirms correction

Sinéad Carew

DJ:  26,957.59  -123.77        NAS:  8,980.77  +15.16         S&P:  3,116.39  -11.82      2/26

DJ:  25,766.64  -1,190.95     NAS:  8,566.48  -414.29        S&P:  2,978.76  -137.63    2/27

New York (Reuters) - Wall Street’s main indexes plunged on Thursday for the sixth straight session, with the S&P 500 confirming its fastest correction in history as the rapid global spread of coronavirus intensified worries about economic growth.  The S&P 500 finished 12% below its Feb. 19 record close, marking its fastest correction ever in just six trading days. The previous record was nine days in early 2018, according to S&P Dow Jones Indices analyst Howard Silverblatt.  The Dow registered a record one-day points drop, which was also its fourth 1,000-point decline in history and the second this week.

All three major U.S. indexes were also on track for their steepest weekly pullback since the gl  obal financial crisis, as new infections reported around the world surpassed those in mainland China.

Governments battling the epidemic from Iran to Australia shut schools, canceled big events and stocked up on medical supplies. In the United States, the Centers for Disease Control and Prevention late Wednesday confirmed an infection of unknown origin in California.  While selling eased for a while during the session the S&P’s losses deepened rapidly in the last hour of trading to end at a session low, registering its biggest one-day percentage loss since August 18 2011.   “The path of this scourge is unknown, therefore you can’t know the economic impact. You can roll the dice but it’s a guess,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.

But Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois, urged some caution.  “People have gone from saying this is a non-event to saying this is the end of the world. There’s room for a middle ground,” said Jankovskis, who suggested opting for defensive bets.  “The virus will spread somewhat but it doesn’t mean that it’ll make the entire world grind to a halt,” he said.

The CBOE volatility index, also known as the fear index, ended near its session high, up 11.60 points at 39.16, its highest level since February 2018.

The Dow Jones Industrial Average fell 1,190.95 points, or 4.42%, to 25,766.64, the S&P 500 lost 137.63 points, or 4.42%, to 2,978.76 and the Nasdaq Composite dropped 414.30 points, or 4.61%, to 8,566.48.  The Dow ended 12.8% below its Feb. 12 record close and Nasdaq closed 12.7% under its Feb. 19 closing peak.

All of the 11 S&P sectors closed lower with real estate, technology and energy sectors all losing more than 5%. The best performers were the healthcare and industrials sectors, which all closed down more than 3%.  The NYSE Arca Airline index ended down 5.7% on fears about travel disruptions around the world, while the Philadelphia SE Semiconductor index, which includes China-exposed stocks, fell 4.7%.

Industry analysts and economists continued to sound the alarm as they assessed the fallout of the outbreak, with Goldman Sachs saying U.S. firms will generate no earnings growth in 2020.

Microsoft Corp, the biggest drag on the S&P, dropped almost 7% 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.  While it was the biggest boost for the S&P, 3M Co pared gains sharply as the day wore on, ending up just 0.8% at $150.16 after rising as high as $155.43. An analyst had upgraded the stock, citing possible benefit from higher sales of respirator masks during the outbreak.

In the busiest trading session at least since July 2014, according to data from Refinitiv, 15.63 billion shares changed hands on U.S. exchanges on Thursday compared with the average 8.67 billion for the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by a 7.51-to-1 ratio; on Nasdaq, a 5.87-to-1 ratio favored decliners.  The S&P 500 posted four new 52-week highs and 102 new lows; the Nasdaq Composite recorded 24 new highs and 489 new lows.