The S&P 500 and the Dow Jones Industrial Average on Monday suffered their biggest one-day loss in two years after an increase in coronavirus cases outside China prompted worries about the global economic impact of the potential pandemic.
The market dip came amidst a significant rise in reported cases of the virus in Europe, pushing investors to get rid of stocks and invest in safe-haven assets like gold, which has hit a seven-year high.
The benchmark S&P 500 index and the blue-chip Dow lowered down to a negative for the year till now and the Dow dropped more than 1,000 points. This is the third time in its history that such a decline has occurred in a day. Both the Dow and the S&P have recorded their biggest one-day percentage declines since February 2018.
Coronavirus has impacted the stocks of some big players. Delta and American airline stocks were both down more than 6% while United closed at a low rate of 5.4%. Casino operators Las Vegas Sands and Wynn Resorts dropped at least 5.2% each in their shares. MGM Resorts slid 5.4%.
Quite a number of companies have warned that coronavirus will prevent them from meeting sales and profit targets for the first three months of the financial year. Reduced demand for goods and services, and factory closures in China, are also expected to have a major impact on the global economy and weigh on trade at a time when countries like Japan and Germany are already teetering on the brink of recession.