Dow plunges 900 points as cases outside China jump

Dow futures plunge 800 points as cases outside China jump


U.S. stocks tumbled Monday after a significant rise in coronavirus cases outside of China revived concerns about a potential economic fallout from the outbreak. 

The Dow Jones industrial average plunged 900 points, or 3.1%, erasing its gains for the year. The Standard & Poor’s 500 slid 3%. The technology-heavy Nasdaq Composite shed 3.4%. All three major averages are still within at least 4.2% of their records. 

Global stocks were pummeled after South Korea reported 231 new cases of the deadly virus Monday, bringing the country’s total to 833 cases. China reported 409 new cases, raising the mainland’s total to 77,150. The 150 new deaths from the illness raised China’s total to 2,592. Elsewhere, a surge in reports of new cases in Iran and Italy raised the prospect of more disruptions.

“Many investors remain complacent about the far-reaching impact of coronavirus, which is continuing to spread – and a faster pace,” Nigel Green, chief executive and founder of financial consultancy deVere Group, said in a note. “This will inevitably hit financial markets and investors’ complacency leaves many wide open to nasty surprises.”

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Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on August 15, 2019 in New York City.

The latest developments raised fresh worries that the outbreak could threaten to derail global growth. Investors fear that production delays in China due to the virus could force multinational companies to cut their earnings outlooks.

“The most worrying thing about the outbreak is that we have no idea how long it will last,” Adam Vettese, analyst at multi-asset investment platform eToro, says in a note. “That causes huge problems for firms that operate cross borders, such as airlines, or who rely heavily on global supply chains, such as manufacturers and healthcare companies.”

Expectations have climbed among traders that the Federal Reserve will cut interest rates this year to help cushion the U.S. economy. Fed-funds futures, used by investors to place bets on the course of the central bank’s policy, showed 90% of the market on Monday priced in at least one rate cut this year, up from a 58% probability a month ago, according to data from CME Group.


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