U.S. stocks crashed on Wednesday, with the Dow Jones Industrial Average ending in bear market zone - the first time in over 10 years - after the World Health Organization declared COVID-19 a pandemic.
The WHO declaration rattled investors already worried about the lack of a clear-cut economic policy response from the Trump administration.
The Dow dropped 1,464.95 points, or 6 percent, to end at 23,553.22, with the blue-chip standard's close under 23,641.14 signifying a bear market, generally defined as a fall of at least 20 percent from a record intraday high.
Just on Monday, the US stock market experienced its worst decline since 2008 due to growing fears that the rapid spread of the coronavirus would drag the global economy into a recession.
The S&P 500 fell 5 percent to 2741.38, and the Nasdaq Composite has shed 4.8 percent to 7952.05. Treasuries were no better, as the output on the 10-year bond climbed 0.074 percentage point to 0.818 percent.
According to Megan Horneman, chief of portfolio planning at Maryland-headquartered Verdence Capital Advisors, the end of the stock market's 11-year bull run is the "swiftest fall from grace" that she has ever seen. "We would have never guessed it would be the coronavirus that could bring the market down."
Markets were seeking some sort of comfort from the U.S. government that a fast fiscal stimulus package to boost the economy's recovery from the coronavirus outbreak would be ready.
However, U.S. Secretary of Treasury Steven Mnuchin on Wednesday disclosed a comprehensive economic stimulus will not be able to easily get Congress' approval and he threw support from the Trump administration behind a less big measure aimed at helping small businesses and employees cope with the global health crisis.
US President Donald Trump told members of the press that he will be releasing a statement regarding the pandemic, Wednesday night. Trump made the comments as he met with the top executives of major financial institutions.
Evercore ISI DC policy analyst Sarah Bianchi noted that political frictions and the calendar are slowing down the route to strong action and it is difficult to see the House of Representatives actually "approving something" this week.
The market's shocking drop and wild swings during the past weeks have scared my capitalists. It was just three weeks ago that the S&P 500 recorded an all-time high. "Investors are becoming very skittish," Gene Goldman, director of investment at Cetera Investment Management, said.
The WHO's designation of the viral outbreak as a pandemic - a term that refers to the fast spread of the disease from person to person on several continents - apparently helped escalate selling pressure on Wall Street.
Meanwhile, policymakers in other countries have started to ease the burden on businesses, with Europe's central bank issuing an emergency interest rate reduction and the U.K. government vowing fiscal stimulus in its budget this year. German Chancellor Angela Merkel, for her part, promised to do "whatever is required," and the ECB's president warned of an economic jolt like the 2008 financial turmoil.
