For the fourth straight session, the market has taken a plunge due to the spread of the coronavirus and, in the last three days, that plunge has amounted to over 2,000 points on the Dow.  The WHO is still saying that’s it’s not yet a pandemic but today the CDC has taken the emphatic position that the worst, much worse, is coming to the U.S.  And today TD Ameritrade has said that the impact will go well beyond Q1, probably beyond all of 2020.  So we had another nearly 900 point drop today.  The Nasdaq, Dow and S&P are today each about 8% below their recent record highs achieved just a week or two ago.  Volume was over 12 billion shares, an historic high not seen in 14 months and the VIX briefly went above 30 for the first time since December 2018.  This will continue until there is evidence that the spread of the virus is slowing down. 

Tue   FEBRUARY 25, 2020 / 6:15 pm 

Wall Street's sell-off deepens as coronavirus fears intensify

Sinéad Carew

DJ:  27,960.80  -1,031.61      NAS:  9,221.28  -355.31        S&P:  3,225.89  -111.86    2/24

DJ:  27,081.36  -879.44         NAS:  8,965.61  -255.67        S&P:  3,128.21  -97.68      2/25

NEW YORK (Reuters) - The Dow and the S&P 500 tumbled 3% on Tuesday in their fourth straight day of losses as the coronavirus spread further around the world and investors offloaded risky assets as they struggled to gauge the economic impact.  Both averages recorded their biggest four-day percentage losses since the massive sell-off in December 2018, while U.S. 10-year Treasury yields hit a record low.  The S&P 500 lost $2.138 trillion in market capitalization over the last four sessions, according to S&P Dow Jones Indices analyst Howard Silverblatt.

Fears of a pandemic escalated after the coronavirus spread to Spain and dozens of countries, from South Korea to Italy, accelerated emergency measures while Iran’s virus death toll rose to 16, the highest outside China.  In the United States, the Centers for Disease Control and Prevention said Americans should prepare for possible community spread of the virus.  “The market’s realizing that though the pace of the infections looked like it was slowing, it’s still spreading globally,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey.  While investors had hoped the economic impact of the virus would be contained to the first quarter, Cruz said many are now estimating that “it’s going to have an impact on the first half of 2020 and probably beyond.”

The Nasdaq ended the session 8.7% below its record closing high, reached last Wednesday, while the S&P finished 7.6% under its record close achieved the same day. A total 314 of the benchmark’s 500 stocks were in correction territory, traditionally viewed as a 10% drop from their high.  The Dow ended the day 8.4% below its February 12 record close.

In the busiest trading day since December 21, 2018, volume on U.S. exchanges was 12.24 billion shares, compared with the 7.99 billion average for the full session over the last 20 trading days.

The Dow Jones Industrial Average .DJI ended down 879.44 points, or 3.15%, at 27,081.36 and the S&P 500 .SPX lost 97.68 points, or 3.03%, to finish at 3,128.21. The Nasdaq Composite .IXIC dropped 255.67 points, or 2.77%, to 8,965.61.  The Cboe Volatility Index , known as Wall Street’s fear gauge, climbed above 30 for the first time since December 2018 and closed at 27.85. 

 

The NYSE Arca Airline index closed down 5%, clocking its biggest three-day decline since October 2011. Delta Airlines Inc (DAL.N), down 6%, said on Tuesday that it expects U.S.-China flights to be suspended until the end of April and expanded its travel waiver to Seoul until April 30.  The Associated Press reported here that a senior member of the International Olympic Committee said organizers are more likely to cancel the 2020 Olympics than to postpone or move them if the coronavirus makes it too dangerous to hold in Tokyo. 

Only 10 S&P stocks advanced on the day, while all of the S&P’s 11 industry sectors fell. The energy sector .SPNY was the biggest loser, with a more than 4% dip as oil prices tumbled.

Marriott International (MAR.O) was the S&P’s biggest percentage decliner, down almost 8%, and other travel stocks such as Tripadvisor (TRIP.O), down 4.7%, and Norwegian Cruise Line Holdings (NCLH.K), down 7.7%, also underperformed sharply.  Mastercard Inc (MA.N) shares fell 6.7%, also putting it among the S&P’s biggest percentage decliners.  HP Inc (HPQ.N), the S&P’s biggest boost, pared early gains but still closed up 5.7% after saying it would step up efforts to slash costs and buy back stock as it sought investor support to defend against a $35 billion takeover offer from U.S. printer maker Xerox Holdings Corp (XRX.N). 

Declining issues outnumbered advancing ones on the NYSE by a 7.42-to-1 ratio; on Nasdaq, a 6.24-to-1 ratio favored decliners.  The S&P 500 posted four new 52-week highs and 43 new lows; the Nasdaq Composite recorded 28 new highs and 230 new lows.