Dow Jones closes in bear market as it plunges 1,400 points
The Dow Jones has entered bear territory after plunging more than 1,400 points as investors panic over the coronavirus outbreak.
The index dropped 1,464.94 points to 23,553.22, which means it is down 20 per cent from its recently set 52-week high. The benchmark S&P 500 closed 4.89 per cent lower while Nasdaq fell 4.37 per cent.
The selloff was a reaction to President Trumo’s lack of fiscal stimulus amid the worsening of the coronavirus outbreak.
It came after the World Health Organisation labelled the coronavirus outbreak as a pandemic.
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President Trump has disclosed little detail of the “very dramatic” measures he promised this week, as coronavirus spreads further in the US. The Centres for Disease Control and Prevention today confirmed 291 new cases, bringing the total to 987. The number of deaths rose by 4 to 29.
US Treasury Secretary Steven Mnuchin said there is no need for intervention in markets due to coronavirus. He said banking regulators are looking at various possible short-term regulatory actions in response to the fast-spreading coronavirus outbreak, but there is no need for invention.
“The Fed has already acted significantly in putting lots of liquidity into the market,” he said.
The European session started well after the Bank of England announced a 0.5 per cent interest rate cut, and Chancellor Rishi Sunak announced a coronavirus stimulus package worth £30bn. However, virus fears continued to dominate the market as the FTSE 100 closed down 1.4 per cent.