The Dow Just Suffered Its Worst Week Since 2008
Both of these statements might be true. The Dow Jones Industrial Average slumped 3,583.05 points, or 12%, to 25,409.36, while the S&P 500 index tumbled 11%, to 2954.22, and the Nasdaq Composite also slid 11%, to 8567.37. All three benchmarks suffered their worst weekly drops since October 2008. To put that in perspective: The S&P 500 shed more than four months’ of gains in just seven trading days.
That the market tumbled as much it did because of the coronavirus also feels almost too obvious too mention. Investors had been hoping that the disease would remain in China, but it managed to breach that nation’s defenses and spread to Italy and South Korea. With that, all bets were off, and each comment made by health officials seemed only to further panic investors. If the stock market had been priced for an earnings acceleration in 2020, by the end of the week it was priced for no growth.
It isn’t the first time that an epidemic has rocked the stock market. The S&P 500 fell 15% after SARS hit the market in 2003, but was up just over 1% six months after the outbreak began. That’s probably the most applicable historical guide to what the market is experiencing now, says Jason Pride, chief investment officer of private wealth at Glenmede.
