U.S. stocks fell into official correction territory on Thursday amid frenzied trading and mounting concerns over the potential economic and corporate damage caused by the spread of the coronavirus. Meanwhile, the Toronto Stock Exchange halted buy and sell orders early because of a technical problem.
The S&P 500 closed down 4.4 per cent to 2,978.76, erasing a tentative comeback in midday trading. It was the benchmark′s biggest one-day percentage drop since 2011.
The total decline from the index’s intraday high on Feb. 19 is now 12.2 per cent – a record-fast correction, defined as a drop of 10 per cent or more, according to Dow Jones Market Data, using numbers going back to 1980. The Dow Jones Industrial Average fell 1,190.95 points, or 4.4 per cent, to 25,766.64, marking the blue-chip index’s biggest point decline in history.
The downturn follows a period of relative calm this month when markets reflected the belief that the coronavirus outbreak would stay contained within China without causing significant global economic damage.
But with the virus now spreading throughout Europe, Asia and North America, this bet is off – and the prospect of significant quarantines, idled factories and interrupted trade networks is now showing up in reduced earnings forecasts and gloomier economic projections.