World
2020.03.12 21:44 GMT+8

Wall Street ends its worst day for three decades amid coronavirus fears

Updated 2020.03.13 08:43 GMT+8
CGTN

The S&P 500, the Dow and the Nasdaq Composite all closed Thursday's session in a bear market, after the WHO declared COVID-19 a pandemic and U.S. President Donald Trump imposed a travel ban for Europe.

The Dow Jones Industrial Average fell 2,352.33 points, or 9.99 percent, to 21,200.89, the S&P 500 lost 260.75 points, or 9.51 percent, to 2,480.63, and the Nasdaq Composite dropped 750.25 points, or 9.43 percent, to 7,201.80.

Drops of the Dow and the S&P 500 were the worst for both since 1987. On October 19, 1987, known as "Black Monday," the Dow crashed 22.6 percent in its biggest ever-single day decline.

The World Health Organization declared the coronavirus outbreak a pandemic on Wednesday.

"In the past two weeks the number of cases outside China has increased 13-fold and the number of affected countries has tripled," WHO Director-General Dr. Tedros Adhanom Ghebreyesus said in Geneva on Wednesday. "In the days and weeks ahead, we expect to see the number of cases, the number of deaths and the number of affected countries to climb even higher."

Later, Trump suspended travel from Europe to the United States for 30 days, sending a shockwave through financial markets that pushed U.S. stock markets into bear market territory.

The S&P 1500 airlines index plunged 10.1 percent with cruise liners Carnival Corp and Royal Caribbean Cruises Ltd. shedding 17 percent and 24 percent, respectively.

Boeing slumped another 15 percent after J. P. Morgan cut its long-term "overweight" rating on the planemaker's shares. The stock, already under pressure from the grounded 737 MAX jets, has lost more than 40 percent this year on the added hit from the virus outbreak.

American Airlines and United Airlines plummeted over 13 percent.

"It's not just the fear of the economy going weak, but basically being on the brink of shutting down," said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.

"It's mass selling across the board (and) we are pricing in a potential to go into another financial crisis."

European shares also plummeted to their lowest in almost four years on Thursday. The benchmark STOXX Europe 600 Index fell 6.3 percent, extending declines to a sixth straight day.

Air France KLM, Lufthansa and British Airways-owner IAG declined between 11.4 percent and 13.5 percent.

Oil prices were also hammered, with both main contracts falling around six percent. The oil market was already under pressure after Saudi Arabia and Gulf partner UAE stepped up a price war with plans to flood the global markets.

The S&P 500 on Monday triggered an automatic 15-minute pause in trading for the first time since the 2008 financial crisis, with the 10-year U.S. Treasury yield tumbling down through 0.5 percent to a record low.

The COVID-19 outbreak, first reported in the city of Wuhan, central China's Hubei Province, last year has already claimed the lives of more than 4,300 people worldwide, with over 110,000 cases confirmed as of Wednesday.

(With input from Reuters)

Copyright © 

RELATED STORIES