Dow enters bear market as WHO calls coronavirus outbreak a pandemic

 New York — Wall Street stocks plunged on Wednesday  with the Dow Jones Industrial Average tipping into a bear market for the first time since the financial crisis after the World Health Organisation (WHO) called the coronavirus outbreak a pandemic.

All three major US stock averages ended the session sharply lower, with the benchmark S&P 500 and Nasdaq composite index both about 19% below their February 19 record closing highs. The Dow closed at 23,553, the S&P  hit  2,741.31, while the tech-rich Nasdaq Composite Index fell to 7,952.05.

Oil resumed its slide. Brent crude for May settlement fell 3.8%, or $1.43c, to settle at $35.79 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate crude for April delivery lost $1.38 to settle at $32.98 in New York.

The WHO called the Covid-19 outbreak a pandemic for the first time. The declaration rattled markets already on edge that the spreading virus will upend global growth.

US President Donald Trump did not  keep his promise to detail stimulus plans, and late on Wednesday said he the US may not need to take those measures “if we get rid of the problem very quickly”. 

The Trump administration continues to promise “major” stimulus, but details remain uncertain. Trump was due to make an announcement later on Wednesday. Democrats plan to urge the president to declare a national state of emergency. Markets are now growing worried that whatever does come will not have the ability to stave off a major blow to the world’s largest economy.

“Every day we get whipsawed back and forth, and what we’re seeing today is general disappointment that US fiscal policy is not at all clear in how it’s going to stimulate the economy,” said Michael Reynolds, an investment strategy officer at Glenmede Trust.

European officials signalled a growing willingness to move soon to combat the virus’s effects on the region’s economy.

Policymakers are seeking to assure traders they are  on alert, with the European Central Bank indicating it may move as soon as this week, the Bank of England cutting rates and German Chancellor Angela Merkel pledging to do “whatever is necessary” to bolster the economy.

Reuters, Bloomberg