Wall Street ended lower on Wednesday, extending its sharp weekly decline as investors’ worry about the economic fallout from the virus outbreak that originated in China which triggered a sharp sell-off at the start of this week and now wipes out the all three major U.S. stock indexes gains for the year.
The virus continues to spread and threatens to hurt industrial production, consumer spending, and travel. More cases are being reported in Europe and the Middle East. Health officials in the U.S. have been warning Americans to prepare for the virus.
The news overnight was not positive in terms of containing the spread of the coronavirus. South Korea reported 169 new cases, bringing the country’s total to 1,146 infected. In Italy, infections now total 325 and cases are now being seen beyond the original epicentre in the north. China reported 406 new confirmed cases and an additional 52 deaths.
The Dow Jones Industrial Average fell -123.77 points, or -0.46%, to 26,957.59, while the S&P 500 dipped -11.79 points or -0.38% to close at 3,116.39. The tech-heavy Nasdaq Composite managed to keep its head above water after rebounding earlier in the session and closed +15.16-point gain, or +0.17% at 8,980.77, after rising as much as 2%.
Disney was the worst-performing Dow stock, trading more than -3% lower after Bob Iger stepped down from his role as CEO. Exxon Mobil and Chevron fell more than 2% each, adding to the Dow’s losses.
Energy, utilities and real estate were dragged the S&P 500 lower. Energy dropped nearly -3% while utilities and real estate both dipped more than -0.8%.
The S&P 500 wiped out a whopping $1.7 trillion in just two sessions between Monday and Tuesday. The equity benchmark nosedived -6.3% since Monday, suffering its most significant two-day drop since August 2015.
The Cboe Volatility Index, known as the market’s “fear gauge,” traded at 28.4 on Wednesday, hovering near its highest level since December 2018.