Live

Watch CBSN Live

Stocks plummet again as coronavirus fears intensify

Global shares plunged Thursday after the World Health Organization declared a coronavirus pandemic and indexes sank on Wall Street.

France's CAC 40 dived 6.6% while Germany's DAX lost 6.7%. Britain's FTSE 100 plummeted 6.5%.

The future contract for the Dow Jones Industrial Average tumbled 5.2% while the S&P 500 lost 4.9%.

There was no sign of a revival of confidence in Asia.

Japan's benchmark Nikkei 225 shed 4.4%. Australia's S&P/ASX 200 cratered 7.4%. South Korea's Kospi fell 4.7%. Hong Kong's Hang Seng lost 3.7% and the Shanghai Composite index dropped 1.9%. Thailand's benchmark plunged 10% in the afternoon session, triggering a 30-minute halt to trading. After it resumed, the benchmark remained down 10%. India's Sensex swooned 7%.

Jackson Wong of Amber Hill Capital Ltd., in Hong Kong said traders were in "a typical panic mode, but whether this panic mode will stop in the short term, it really will depend on how the virus incident goes forward."  

The recent decline has been one of Wall Street's swiftest. The fastest the S&P 500 has ever fallen from a record into a bear market was over 55 days in 1987.

Vicious swings are becoming routine as investors rush to sell amid uncertainty about how badly the outbreak will hit the economy. Wednesday's loss of 1,464.90 points wiped out a 1,167-point gain for the Dow from Tuesday and stands as the index's second-largest point drop, trailing only Monday's plunge of 2,013.

Investors are calling for coordinated action from governments and central banks to stem the threat to the economy from the virus. While lower interest rates and government spending won't solve the crisis - only containment of the virus can - they can support the economy.  

President Trump's announcement of travel restrictions for most European countries and a multibillion-dollar aid package that the House could vote on Thursday failed to lay doubts to rest.

"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 vast majority of people recover from the new virus, but the fear is that COVID-19 could drag the global economy into a recession, with slowdowns in production and a plunge in business activity as people stay home instead of traveling or dining out.

United Airlines has lost more than a third of its market value since Feb. 21 because many people don't want to risk flying. Cruise lines have also been hard hit. Even Apple, which entered 2020 after making sharp gains, has shed 6% since the beginning of the year with the slowdown in output of iPhones in China.

The coronavirus outbreak has moved so fast that its impact hasn't yet shown up in any U.S. nationwide economic data. Many economists still think the U.S. can avoid a recession, particularly if the disease is under control by early summer. But most also think the odds of a recession have risen significantly.

Many analysts say financial markets will continue to swing sharply until the number of new infections stops accelerating. In the United States, the number of cases has topped 1,000. Worldwide, more than 126,000 people have been infected, and over 4,600 have died.

"There's a real feeling that we don't know where this ends," said Brad McMillan, chief investment officer for Commonwealth Financial Network.

A plunge in crude prices has wiped out profits for energy companies, while record-low Treasury yields are squeezing the financial sector.  

View CBS News In
CBS News App Open
Chrome Safari Continue