Dow tumbles into bear market

NEW YORK » Stocks tumbled again Wednesday as fears about the economic damage from the coronavirus intensified and investors questioned whether any economic response from Washington would be enough — if it happens at all.

The Dow Jones Industrial Average dropped 1,464 points, dragging it 20% below the record set last month and putting it in a bear market. The broader S&P 500 index, which professional investors watch more closely, is a single percentage point away from falling into its own bear market, which would end one of the longest bull markets in Wall Street history.

The decline has been one of the swiftest sell-offs of this magnitude. The fastest the S&P 500 has ever fallen from a record into a bear market was over 55 days in 1987.

Vicious swings like Wednesday’s session are becoming routine as investors rush to sell amid uncertainty about how badly the outbreak will hit the economy. The day’s loss wiped out a 1,167-point gain for the Dow from Tuesday and stands as the index’s second-largest point drop, trailing only Monday’s plunge of 2,013.

With Wall Street already on edge about the economic damage coming from the virus, stocks dove even lower Wednesday after global health officials declared the outbreak a pandemic.

Investors are calling for coordinated action from governments and central banks around the world to stem the threat to the economy from the virus. Doubts are rising about what can come from the U.S. government, though, even after President Donald

Trump promised some aid.

Investors know that lower interest rates or government spending programs alone will not solve the crisis. Only the containment of the virus can do that. But such measures could help support the economy in the meantime, and investors fear things would be much worse without them.

The Bank of England became the latest big central bank on Wednesday to make an emergency interest-rate cut in hopes of blunting the economic pain caused by the virus, which economists call the global economy’s biggest threat.

ThestakesarerisingastheWorld Health Organization cited “alarming levels of inaction” by governments in corralling the virus when it made its pandemic declaration.

“The government probably should have been thinking about stimulus last month,” said Kristina

Hooper, Invesco’s chief global market strategist. “Every day that passes makes the economic impact of coronavirus that much worse.”

Many investors are worried that a divided Congress will have trouble agreeing to any plan, she said.

Besides worries about the virus and the government’s ability to get something done for the economy, the market was also weighed down by a continued decline in oil prices, said Patrick Schaffer, global investment specialist at J.P.Morgan Private Bank.

“I want all retail investors to expect this environment will continue: sharp down days, sharp up days,” he said. “This feeling of whiplash that people feel probably continues for some period of time.”

The speed of the market’s declines and the degree of its swings thelastfewweekshavebeenbreathtaking. The Dow Jones Industrial Average has had seven days in the last few weeks where it swung by 1,000 points. That has happened just three other times in history.

For most people, the new coronavirus 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 illness, including pneumonia.

The vast majority of people recover from the new virus, but the fear is that COVID-19 could drag the global economy into a recession by hitting it from both sides — supply and demand.

On the supply side, the worstcase scenario has companies with fewer things to sell as factories shut down and workplaces dim the lights because workers are out on quarantine. On the demand side, companies see fewer customers because people are huddling at home instead of taking trips or going to restaurants.