By Mark DeCambre, MarketWatch
It finally happened.
A bona fide selloff took hold Monday on Wall Street after investors spent weeks attempting to come to terms with the potential impact of the COVID-19 outbreak as it spreads in countries outside of China, notably Italy and Iran, threatening to dent global supply chains and economies.
There are now 79,339 cases of COVID-19 — the infectious disease derived from the novel strain of coronavirus that reportedly originated in Wuhan, China, last year — in 30 countries, and 2,619 deaths, according to the latest figures from the World Health Organization.
Third-biggest point drop...ever
The day’s decline marks the third-biggest daily point drop for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.62% in its 124-year history. The blue-chip benchmark closed 1,031.61 points, or 3.56%, lower, to end at 27,961, not far from the intraday low at 27,912.44.
|Date||Point change||% change|
|Feb. 5||-1,175 points||-4.60%|
|Feb. 24 (at low)||-1,031.61||-3.56%|
To be sure, such point drops are less meaningful because the Dow has been trading at lofty levels. For example, the Dow’s 1987 crash was a 508-point decline but that fall represented a 23% plunge back then.
Ryan Detrick, senior market strategist at LPL Financial, also points out that it was the 254th worst day for the Dow on a percentage basis (see attached tweet).
1.32% or bust
The 10-year Treasury note yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +3.05% tumbled more than 10 basis points to trade at 1.367% on Monday, just shy of its June 2016 record low of 1.32%. Bond prices rise as yields fall. The 30-year bond yield /zigman2/quotes/211347052/realtime BX:TMUBMUSD30Y +1.88% , known as the long bond, hit an all-time low last week, raising worries that bond investors are betting on economic pain ahead.
Government bonds have been hovering around lows even as stocks have been climbing, an odd dynamic in the market and has implied that investors are unsettled by the uncertainty surrounding the outbreak.
3% or worse
Monday’s selloff marks the first time all three major benchmarks — the Dow, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.36% , and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.35% — each fell by at least 3% on the same day since Dec. 4, 2018, according to Dow Jones Market Data.
The 11 sectors of the S&P 500 index all finished in the red, led by a 4.74% decline in the energy sector /zigman2/quotes/206420077/composite XLE +2.43% , which suffered the worst daily percentage loss since Aug. 24, 2015.