Wall Street Pounded as WHO Deems COVID-19 Outbreak a Pandemic

Wall Street plunged on Wednesday, bringing the stock market closer to bear market confirmation after the World Health Organization said it now considers the COVID-19 outbreak a pandemic.

Market participants were further rattled following a Reuters report that the White House had ordered top-level coronavirus meetings to be classified.

“I see a bear market being confirmed but I don’t think it’s going to last,” said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York, referring to a market drop of more than 20%. “There’s so much uncertainty it’s hard to say but my feeling is this too will pass.”

All three U.S. stock averages sank, midway through a week whipsawed by news about coronavirus developments and economic stimulus hopes.

The benchmark S&P 500 index and the Nasdaq were last about 19% below the record closing highs reached on Feb. 19.

A lack of details from the Trump Administration regarding its plans for fiscal stimulus, and partisan wrangling in Washington, added further unknowns to the mix.

“There were a lot of ideas floated from the White House but without any clarity of anything coming about from those discussions, it’s not going to help,” said Pavlik. “It adds additional uncertainty to a very uncertain market.”

Boeing Co <BA.N> was the biggest drag on the blue-chip Dow, sinking 14.9% after announcing plans for a full drawdown of an existing $13.8 billion loan as early as Friday. The planemaker is on course for its biggest three-day fall since the aftermath of the Sept. 11, 2001 attacks.

Stocks worldwide lost ground despite global stimulus efforts to soften the economic blow of the virus, named COVID-19, with Britain and Italy announcing war chests to contend with the growing crisis.

Concerns over the fast-spreading virus, named a pandemic by the World Health Organization (WHO) on Wednesday, have ravaged markets and hobbled supply chains as countries around the world grapple with how to contain both the virus and its economic impact.

As part of those efforts, the U.S. Federal Reserve is widely expected to cut interest rates for a second time this month at the conclusion of a two-day monetary policy meeting next week.

The Dow Jones Industrial Average <.DJI> fell 1,388.36 points, or 5.55%, to 23,629.8, the S&P 500 <.SPX> lost 145.7 points, or 5.06%, to 2,736.53 and the Nasdaq Composite <.IXIC> dropped 411.69 points, or 4.93%, to 7,932.56.

All 11 major sectors in the S&P 500 were trading sharply lower.

Rate-sensitive banking stocks <.SPXBK> were down 5.7% as U.S. Treasury yields dropped.

Nike Inc <NKE.N> fell 5.3% on fears of virus-related sales slump in China.

Declining issues outnumbered advancing ones on the NYSE by a 13.66-to-1 ratio; on Nasdaq, a 7.96-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 99 new lows; the Nasdaq Composite recorded 6 new highs and 605 new lows.

(Reporting by Stephen Culp; Editing by Bernadette Baum)