Wall Street suffers its worst day since 1987 as COVID-19 fears spread

The escalating coronavirus emergency sent the stock market Thursday into its worst slide since the Black Monday crash of 1987, extending a sell-off that has now wiped out most of Wall Street’s big gains since President Donald Trump took office.

The S&P 500 plummeted 9.5%, for a total drop of 26.7% from its all-time high, set just last month. That puts it way over the 20% threshold for a bear market, officially ending Wall Street’s unprecedented bull-market run of nearly 11 years. The Dow Jones industrial average sank 2,352 points, or 10%, its heaviest loss since its nearly 23% drop on Oct. 19, 1987.

European markets fell 12% in one of their worst days

ever, even after the European Central Bank pledged to buy more bonds and offer more help for the economy.

Late Thursday, Asian markets plunged. Japan’s benchmark sank 10%, South Korea’s Kospi fell 8.1%, Sydney’s S&P ASX/200 gave up 7.6% and Hong Kong’s Hang Seng shed 6.3%.

The rout came amid a cascade of cancellations and shutdowns across the globe — including Trump’s suspension of most travel to the U.S. from Europe — and rising worries that the White House and other authorities around the world can’t or won’t counter the economic damage from the outbreak soon.

“We’re starting to get a sense of how dire the impact on the economy is going to be. Each day the news doesn’t get better; it gets worse. It’s now hit Main Street to a more significant degree,” said Liz Ann Sonders, the chief investment strategist at Charles Schwab.

Stocks fell so fast on Wall Street at the opening bell that they triggered an automatic, 15minute trading halt for the second time this week. The socalled circuit breakers were first adopted after the 1987 crash, and until this week hadn’t been tripped since 1997.

The Dow briefly turned upward and halved its losses at one point in the afternoon after the Federal Reserve announced it would step in to ease “highly unusual disruptions” in the Treasury market. But the burst of momentum quickly faded.

Trump often points proudly to the big run-up on Wall Street under his administration, warning a crowd at a rally last August that “whether you love me or hate, you gotta vote for me,” or else your 401(k) will go “down the tubes.”

Just last month, the Dow was boasting a nearly 50% increase since Trump took the oath of office on Jan. 20, 2017. By Thursday’s close, the Dow was clinging to a 6.9% gain, although it was still up nearly 16% since just before Trump’s election in November 2016.

The Dow officially went into a bear market Wednesday, when it finished the day down more than 20% from its all-time high.

For the S&P 500, this is the fastest drop since World War II from a record high to a bear market.

The combined and retreat on health crisis Wall Street heightened fears of a recession.

“This is bad. The worst and fastest stock market correction in our career,” Chris Rupkey, the chief financial economist at MUFG Union, said in a research note overnight. “The economy is doomed to recession if the country stops working and takes the next 30 days off. The stock market knows it.”

The coronavirus has infected about 128,000 people worldwide and killed more than 4,700. The death toll in the U.S. climbed to 39, with more than 1,300 infections. For most people, the virus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illnesses, including pneumonia. The vast majority of people recover from the virus in a matter of weeks.

In a somber prime-time address Wednesday night from the White House, Trump announced the new travel ban as well as measures to extend loans, payroll tax cuts and other financial relief to individuals and businesses hurt by the crisis.

But the travel restrictions represented another heavy blow to the battered airline and travel industries, and the other measures did not impress Wall Street.