Fears that the coronavirus may be spreading in the United States sent stocks tumbling on Thursday.
“Markets move sharply when fear and uncertainty are prevalent, and there is plenty of both right now,” said Greg McBride, the chief financial analyst for Bankrate.com.
The Dow Jones Industrial Average dropped by 4.44%, or 1,197.43 points. Thursday’s loss beats the 777-point drop in September 2001, when Congress failed to pass the $700 billion bank bailout, which was the largest one-day decline in the index’s history.
The S&P 500 and the Nasdaq composite also suffered losses, with both closing down 4.43% and 4.61%, respectively.
The yield on 10-year Treasury notes earlier on Thursday dropped to 1.25%, a new low. It closed at 1.33%. The price of crude oil dropped 4.99%.
The drop in the markets comes as Northern Ireland confirmed its first case of the virus, and Facebook canceled its software developer conference because of the outbreak. So far this week, investors have lost $2 trillion because of how markets have responded to the virus.
If a major outbreak were to occur in the U.S., economists expect that the economic disruption would be short-lived but widespread as people refrain from leaving their homes. It could also pose a risk to the current economic expansion that is in its 11th year.
