Dow closes 1,000 points lower on COVID-19 fears

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Feb. 24 (UPI) — Heightened concern about the growing coronavirus outbreak spread to Wall Street and European markets Monday, leading the Dow Jones Industrial Average to drop 1,031 points, or 3.56 percent, at the close of trading.

The bellwether index had fallen nearly 930 points by noon EST Monday and ended the day at 27,961 after reaching a low of 27,912. The S&P 500 fell almost 112 points, or 3.35 percent to close at 3,226, and the Nasdaq had shed 355 points, closing down 3.71 percent at 9,221.

It was the first time all three benchmarks fell by at least 3 percent on the same day since Dec. 4, 2018. Still, the drop didn’t come close to triggering safety measures put in place to halt trading during steep sell-offs. The New York Stock Exchange can halt trading for 15 minutes if the S&P 500 falls 7 percent from the previous day’s close, again at 13 percent, and can halt for the remainder of the day if the sell-off reaches 20 percent. A halt hasn’t been imposed since Dec. 1, 2008, when the S&P 500 closed down 8.9 percent.

New outbreaks in South Korea, Italy and Iran helped shake the markets even though health officials noted a decline of cases in China, which is where the COVID-19 began in December. More than 2,400 people in China have died from the virus.

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“The spike in infections in South Korea, mostly concentrated in the congregation of a single church, a surge in cases in Italy, and news of an outbreak in Iran, where the healthcare system is of uncertain quality and the government is secretive, has triggered fears that China’s aggressive quarantining efforts won’t keep the virus from spreading globally,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told clients Monday.

South Korea’s Kospi index tumbled nearly 4 percent at its close Monday, its worse daily performance since October 2018. Italy’s top market fell 5.2 percent and the STOXX Europe 600 index lost 3.4 percent.

Stocks related to the travel industry — like Delta Air Lines, American Airlines, Wynn Resorts and MGM Resorts — all saw losses of at least 4 percent in early trading.

“Coronavirus has struck at a time when major economies, including Japan, Germany, India and Hong Kong are facing a downturn due to other factors such as the U.S.-China trade dispute and political protesters, which could hit the world economy,” said Nigel Green, CEO of the deVere Group.


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