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Wall Street tanks, enters 'bear market' on virus fears

Mar 12 2020 06:42
Traders and financial professionals work on the fl

Traders and financial professionals work on the floor on the New York Stock Exchange. (Photo: Drew Angerer, AFP)

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Wall Street stocks suffered another brutal rout Wednesday, pushing the Dow into a "bear market" after the latest series of event cancelations and company warnings rattled investors.

The Dow Jones Industrial Average plunged around 1,465 points, or 5.9 percent, to 23,553.22.

The broad-based S&P 500 slumped 4.9 percent to 2,741.38, while the tech-rich Nasdaq Composite Index shed 4.7 percent to 7,952.05.

Wednesday's session puts the Dow down more than 20 percent from its peak, making it a bear market.

The latest announcements included the cancelation of the Houston Rodeo and the World Figure Skating Championships, which had been scheduled to take place in Montreal.

Washington state and San Francisco announced bans on mass events, while hotel chain Hilton became the latest big company to withdraw its earnings forecast due to the clouded economic forecast.

"All these announcements coming out are sending people running for the hills," said Maris Ogg of Tower Bridge Advisors. "It's still gonna take some time until the market gets past the panic."

The World Health Organisation called the new coronavirus outbreak a pandemic, issuing a grim warning that the global spread and severity of the illness was due to "alarming levels of inaction".

While stocks rallied on Tuesday, equities have been on a broad downward trend for the last three weeks or so as the coronavirus has morphed from a China problem to a global worry, threatening the 11-year "bull" market for US stocks.

There have been more than 124,000 confirmed cases of the virus, with more than 4,500 fatalities as the virus has spread to more than 100 countries and territories.

US Treasury Secretary Steven Mnuchin told a congressional panel the administration was "working full time" on a package, although key lawmakers balked at a payroll tax relief plan floated by the administration.

Travel-linked stocks remained an especially ugly sector, with Marriott International down 9.0 percent, United Airlines 6.1 percent and Expedia 10.8 percent.

Boeing was the biggest loser in the Dow, slumping 18.2 percent as it announced it was suspending most hiring and overtime pay as it works to conserve cash in the face of twin crises: the grounding of the 737 MAX and a massive slowdown in travel due to coronavirus.

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