Dow opens another 500 points because coronavirus fears drive the worst week on Wall Street since the Great Recession
- US stock indices opened considerably lower on Thursday as sales continued
- Follows report of first US community transmission of coronavirus in California
- The future of Thursday points to a cumulative decrease of 10%, correction area
US stock indexes have opened considerably lower on Thursday Thursday the rapid spread of the corona virus outside of China increased investors’ concerns about growth and corporate profits.
If the Dow ends the day with 361 points or more, he would enter correction zone, defined as a 10 percent or more decrease in recent peaks. Markets have made corrections several times since the Great Recession in 2009, although not as fast as this week.
Investors’ fears are driving the number of new corona virus infections in China, the source of the outbreak, for the first time to new cases elsewhere on Wednesday, particularly in Italy and Iran.
Traders are seen on the NYSE on Wednesday. Futures of US stock indices indicated a significantly lower open on Thursday
In addition to the concerns, the US Centers for Disease Control and Prevention confirmed an infection in California in a person who allegedly had no relevant travel history or exposure to another known patient.
“In the past week, markets have come to realize that the outbreak is much worse and now realistically determines the impact of the virus on the economy,” said Philip Marey, senior US strategist at Rabobank.
“In that sense it is a bit of catching up with the relative optimism that was there in the beginning when markets thought (the virus) to China will be limited with a small outbreak outside.”
The growing fear of a pandemic, which the US health authorities have probably warned about, cleared about $ 1.84 trillion from the S&P 500 benchmark this week alone.
Industry analysts and economists continued to raise the alarm when assessing the impact of the corona virus, with Goldman Sachs saying that US companies will not generate profit growth in 2020.
A five-day display of the Dow Jones industrial average shows the cumulative declines this week
Bank of America has lowered its forecast for world growth to the lowest level since the peak of the global financial crisis.
All 30 blue-chip components of the Dow Jones Industrials were traded in red, with Microsoft Corp, Apple Inc. and Visa Inc falling between 2.6% and 3.3%.
Gilead Sciences, however, jumped 6.4% because the drug maker said it had started two late-phase studies to test its experimental antiviral drug, remdesivir, in patients with coronavirus disease cases.
Benchmark 10-year US government bonds fell to record lows, while gold rose 0.5%. Oil prices have fallen to their lowest point in more than a year for fear of lower demand.
The S&P 500 fell for a fifth consecutive session on Wednesday as investors were concerned about the impact of the crisis on global supply chains, which have already been bruised by drastic containment measures in China.