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The Dow Jones Industrial Average dropped nearly 1,200 points today to close at 25,766.64, marking the worst intraday point decline in the history of the Dow. The Nasdaq stock market fell over 400 points.
Behind the collapse was a growing realization that COVID-19, the coronavirus strain sweeping across the globe, has indeed landed on U.S. shores and will likely have a much stronger effect on the economy than analysts and investors initially predicted.
Morning trading showed that economists and investors were not assuaged by the reassurances from President Donald Trump and Vice President Mike Pence, who repeatedly indicated that the U.S. was well-prepared to meet the threat posed by the spreading virus.
It was only minutes after the press conference concluded that the Centers for Disease Control and Prevention issued a statement that the U.S. had identified its first case of community infection -- when a person who was not known to have traveled outside of the U.S. or had been in contact with anyone who had been infected with the virus was diagnosed with the disease.
Most technology companies weren't able to avoid the crumbling faith investors displayed toward the short-term prospects of the U.S. economy if it's forced to endure a prolonged slowdown thanks to the illness. (Though there were a few exceptions.)
Facebook shares were down nearly 4%, or $7.35, to close at $189.75, while Amazon dropped $95.29 -- or 4.81% -- to close at $1,884.30. Apple and Microsoft were the hardest hit, with their shares off 6.5% and 7%, respectively. Microsoft closed down $11.99 at $158.13 and Apple closed at $273.52.
SaaS stocks wound up down 2.7%, while the Nasdaq itself closed off 4.6%.
To better illustrate what is going on, here is a set of figures. Just a few days ago, in mid-February, the Nasdaq was testing the 10,000 point threshold, a result that would have been not only an all-time record, but a key psychological barrier as well. Instead, after reaching fresh highs on the 19th, the Nasdaq is worth just a bit over 8,500 on the 27th. That's a big rejection of optimism.
More in the morning when the markets open again, and react to the night's news.