All three major indexes tanked roughly 5%, erasing gains made during Tuesday’s rebound. The drop ushered in another day of heightened volatility from coronavirus risks and the escalating oil-market war between Russia and Saudi Arabia.
Losses extended in afternoon trading after the World Health Organization declared the coronavirus outbreak a pandemic.
The Dow Jones industrial average slid into a bear market — or a more than 20% decline from its February 19 high — ending the equity benchmark’s longest period of expansion.
Here’s where major US indexes closed on Wednesday:
House Democrats said they planned to unveil a spending package on Wednesday meant to cushion the outbreak’s effects on the economy. The legislation is expected to include expansions to unemployment insurance, food stamps, and paid sick leave. A vote on the bill could arrive as soon as Thursday.
Goldman Sachs joined other financial giants on Wednesday in revising its S&P 500 earnings estimate lower, citing the growing fallout from the coronavirus outbreak and the new oil-market chaos. Analysts at the firm said they expected the benchmark index to post its first annual profit contraction in five years as the two threats tear into corporate growth and economic activity.
The 11-year bull market “will soon end” as the global economy grapples with escalating risks, but markets should bounce back once the virus can be contained, Goldman said Wednesday morning.
Investors mulling their next move in the new bear market should have enough cash to get through immediate needs over the next 12 to 24 months, Rich Steinberg, the chief market strategist at The Colony Group, told Markets Insider. The market decline serves as an attractive entry point for those who can stomach short-term volatility, the strategist said.
“It’s hard to pull that trigger, but investors should have a shopping list of names that they didn’t think they could own because they were too expensive,” he added.
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