Dow jones industrial average jumps 300 points after coronavirus rout

U.S. stocks stabilized Wednesday as investors continued to weigh the fast-spreading coronavirus and its impact on the economy. 

The Dow Jones industrial average jumped 300 points after shedding nearly 2,000 points over the past two days. Heading into Wednesday, the blue-chip average is off 8.4% from its Feb. 12 record, putting it on the brink of a correction, generally defined as a decline of 10% from a recent high. 

On Wednesday, the Standard & Poor’s 500 rose 1.4%. Tuesday marked the first back-to-back 3% losses for the S&P 500 since the summer of 2015. The index is the main benchmark for mutual funds. The Nasdaq Composite added 1.6%. 

Investors were spooked this week as more companies, including United Airlines and Mastercard, warned the outbreak of a coronavirus will hurt their finances, and more cases were reported in Europe and the Middle East, far from the epicenter in China. Meanwhile, U.S. health officials called on Americans to be prepared for the disease to spread in the United States, where there are currently just a few dozen cases.

“The market had been too complacent about a virus that continues to spread across continents, and which will have a considerable impact on growth moving forward,” Anthony Saglimbene, global market strategist at Ameriprise Financial, says in a note. “This could lead to more near-term market volatility and pressure stock prices further.”

The viral outbreak that originated in China has now infected more than 80,000 people globally, with more cases being reported in Europe and the Middle East. The majority of cases and deaths remain centered in China, but the rapid spread to other parts of the world has spooked markets and raised fears that it will hurt the global economy.