Stocks sunk far deeper Wednesday on continued coronavirus fallout, tumbling over 1,400 points, or 5.9%, to close at 23553. It meant the 20% decline from its market high had been breached, with the 11-year bull market officially over and a bear market beginning.
The S&P 500 fell 4.6% to close at 2741, while the Nasdaq Composite shed 4.7%. The S&P came close to bear territory as well, closing just 33 points above the threshold.
While 401k advisors generally advise a do nothing (or little) approach in times of panic, participants weren’t listening, with Alight Solutions noting that its 401k Index recently saw 11.37 times average trading—the second-highest trading multiplier in its history.
The CDC reports a total of 938 confirmed cases of COVID-19 in the United States, with 29 deaths and 39 jurisdictions reporting cases (38 states and District of Columbia).
Losses were fueled by news that the World Health Organization had officially named the coronavirus as a pandemic.
The Wall Street Journal notes that a pandemic is generally defined by the WHO “as a disease that has become widespread around the world, with an impact on society. The term has been applied to only a few diseases in history—deadly flu in 1918, the H1N1 flu in 2009 and HIV/AIDS among them.”
“On Monday, as the number of confirmed cases worldwide hit 113,584, the WHO had said the new coronavirus was close to becoming a pandemic,” the paper added. “By Wednesday afternoon, confirmed cases had grown to 121,564 in 118 countries and regions, data compiled by Johns Hopkins University showed. More than 4,370 people have died.”
Congressional testimony
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, testified earlier Wednesday that COVID-19 cases will continue to increase because of the difficulty of containment.
“Is the worst yet to come, Dr. Fauci?” Rep. Carolyn Maloney,D-NY, asked during a hearing of the House Committee on Oversight and Reform.
“Yes, it is,” Fauci answered. “I can say we will see more cases, and things will get worse than they are right now. How much worse we’ll get will depend on our ability to do two things: to contain the influx of people who are infected coming from the outside, and the ability to contain and mitigate within our own country.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.