The Dow Jones industrial average dropped more than 1,400 points, or 5.9%, on Wednesday as fears of an economic fallout from the coronavirus outbreak grip markets again.
The losses accelerated after health authorities declared the outbreak a pandemic, and brought the U.S. stock market to the end of one of its greatest-ever runs.
The Dow closed at 23,553. The S&P 500 dropped 4.9%, or 140 points, to finish at 2,741. The NASDAQ dropped 4.7%, to 7,952.
Wednesday’s losses sent the Dow down more than 20% below its recent high from February and into a bear market.
Investors are still waiting for details from the Trump administration about aid promised for the economy. The stakes are rising as the World Health Organization cited “alarming levels of inaction” by governments in corralling the virus when it made its pandemic declaration.
The Bank of England cut interest rates as an emergency measure, following similar moves by central banks in the U.S. and Canada.
“The government probably should have been thinking about stimulus last month,” said Kristina Hooper, Invesco’s chief global market strategist. “Every day that passes makes the economic impact of coronavirus that much worse.”
Many investors are worried that a divided Congress will have trouble agreeing to any plan, she said.
The market was also weighed down by a continued decline in oil prices, which fell another 4%.
Besides worries about the virus and the government’s ability to get something done for the economy, the market was also weighed down by a continued decline in oil prices, said Patrick Schaffer, global investment specialist at J.P.Morgan Private Bank.
“I want all retail investors to expect this environment will continue: sharp down days, sharp up days,” he said. “This feeling of whiplash that people feel probably continues for some period of time.”
The Dow Jones industrial average has had six days in the last few weeks where it swung by 1,000 points, not including Wednesday. The Dow has done that only three other times in history.