Skip to main content

Dow Ends Down Nearly 1,200 Points as Wall Street's Awful Week Gets Worse

Wall Street falls into correction territory as coronavirus fears have markets reeling.
  1. Stocks finished sharply lower Thursday, putting Wall Street on pace for its worst week since the global financial crisis in 2008.
  2. Coronavirus update: 2,744 deaths in China and 78,497 confirmed cases. Globally, there are 2,810 deaths and 82,550 cases.
  3. Microsoft is Real Money's Stock of the Day after the tech giant signaled it would fall short of previously issued fiscal third-quarter sales guidance.

Stocks ended sharply down Thursday, putting Wall Street on pace for its worst week since the global financial crisis in 2008, as coronavirus infections accelerated and health officials confirmed that a California man contracted the disease despite having no travel links or contacts with those afflicted by the virus.

The Dow Jones Industrial Average finished down 1,190 points, or 4.42%, to 25,766, the S&P 500 dropped 4.42% and the Nasdaq fell 4.61% - the day saw the worst one-day percentage declines in more than eight years.

The Dow and S&P 500 have declined for six straight days.

“Despite a 12% decline since the S&P 500 peaked on February 19, what we’ve seen is a correction, not a crash,” said Greg McBride, chief financial analyst for Bankrate. “This brings the market back to where it was in mid-October, just 4-1/2 months ago.”

Markets move sharply when fear and uncertainty are prevalent, McBride added, “and there is plenty of both right now.”

A patient in Northern California is now the 60th confirmed case of the coronavirus in the United States and is suspected of being the first U.S. case of a patient getting the coronavirus through "community spread" — with no history of travel to affected areas or exposure to someone known to have the illness.

In other developments, California Gov. Gavin Newsom said the state was monitoring 8,400 people for the coronavirus infection after they traveled to Asia. Japan said it was closing schools until April. Saudi Arabia suspended pilgrimages to Mecca. The number of cases reported in Italy doubled overnight. 

President Donald Trump said Wednesday that the risk to Americans was "very, very low," and he placed Vice President Mike Pence in charge of his administration's response to the growing global health crisis.

Jeffrey Halley, senior Asia Pacific market analyst at Oanda, said neither Trump's comments about the virus nor his administration's response to controlling its potential spread "inspired an already shaky North American market.”

Investors certainly didn't appear convinced by Trump's remarks and continued to seek out safe-haven assets such as gold and U.S. Treasury bonds.

Scroll to Continue

TheStreet Recommends

The 10-Year U.S. Treasury Yield was at 1.299% after hitting an intraday low of 1.246%, both of which are record low yields for the 10-year Treasury. The previous record low closing yield for the U.S. Treasury 10-year was 1.31% and the previous intraday low was 1.30%, both set Wednesday.

The 30-Year U.S. Treasury Yield was 1.783% after hitting an intraday low of 1.747%, both of which are record low yields for the bond. The previous record close for the U.S. Treasury 30-year bond was 1.798% and the previous intraday low was 1.786%, both set Wednesday.

Goldman Sachs issued a note Thursday saying that a spread of the coronavirus across the globe could impact U.S. companies, enough so that they would generate no earnings growth in 2020.

The number of coronavirus cases worldwide has surpassed 82,000, and new infections outside of China, where the virus originated, have exceeded those within the country. Johns Hopkins University puts deaths from the virus at 2,810, including at least 50 outside of China.

Microsoft  (MSFT) - Get Microsoft Corporation Report was the latest tech company to signal that it will miss financial targets because of the coronavirus outbreak. The stock, the Dow's worst performer, finished down 7.1%.

The company warned investors that it will fall short of previously issued fiscal third-quarter sales guidance of between $10.75 billion and $11.15 billion for its "more personal computing" segment, which includes Windows OEM and Surface. Microsoft said it still expects intelligent cloud revenue of $11.85 to $12.05 billion in the three-month period.

"Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call," the company said. "As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.

Apple  (AAPL) - Get Apple Inc. Report warned last week that the health crisis would result in lower revenue for the current quarter.

Microsoft and Apple are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

Gilead Sciences  (GILD) - Get Gilead Sciences Inc. Report rose Thursday after the drugmaker said it will soon begin two Phase 3 studies to evaluate the safety and efficacy of remdesivir in adults diagnosed with Covid-19, the name for the new coronavirus.

Gilead said the studies, to begin in March, will enroll about 1,000 patients at medical centers primarily in Asian and other countries with high numbers of diagnosed coronavirus cases. The company said the studies follow the Food and Drug Administration's rapid review and acceptance of Gilead's investigational new drug filing for remdesivir.

Best Buy  (BBY) - Get Best Buy Co. Inc. Report posted stronger-than-expected fourth-quarter earnings and forecast solid profits for the next fiscal year even as it said it was closely monitoring the potential impact of the coronavirus.