By Mark DeCambre, MarketWatch
The U.S. stock-market rally has been unraveling, with a period of historic gains coming to a screeching halt, as fear that the coronavirus epidemic may reach America rattles Wall Street.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.97% finished lower for a fifth straight day along with the S&P 500 index, with the blue-index marking its biggest reversal from an intraday high, up 461.42 points, to booking a 124-point loss, since Dec. 21, 2018, according to Dow Jones Market Data.
The skid puts the Dow 8.78% away from its Feb. 12 record-high close of 29,551.42. That means the Dow is approaching correction territory at 26,596.28, defined as a drop of at least 10%, but not greater than 20%, from a recent peak.
Meanwhile, the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.49% and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.10% finished mixed. The S&P 500 is off 7.97% from its recent record high on Feb. 19.
The Nasdaq is off 8.52% from its Feb. 19 all-time closing high after a tepid gain on Wednesday. Put another way, its recent decline is 1.48 percentage points from representing a correction. That would occur at the 8,835.46 level.
Here’s are 5 reasons that the market is falling:
Fear of the COVID-19 disease infecting the U.S. is intensifying. The illness derived from the novel coronavirus, SARS-COV-2, which originated in Wuhan, China, late last year, is starting to affect global trade and travel and taking a bite out of confidence about earnings and economic growth.
Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention, said on Tuesday that “the disruption of daily life might be severe.”
The World Health Organization hasn’t declared the viral infection a pandemic, but the disease, from the family of viruses known as SARS, or severe acute respiratory syndrome, has sickened people in China, South Korea, Japan, Malaysia, Italy and Iran. And according to Reuters , Austria, Spain, Croatia and Switzerland have also confirmed their first cases.
The virus has virtually crippled swaths of manufacturing in China, the second largest economy in the world, and the country is a big buyer of products and services from other countries. U.S. technology companies such as Apple Inc. /zigman2/quotes/202934861/composite AAPL -0.90% depend on Chinese supplies.
At last check, COVID-19 has sickened 81,312 cases, and claimed 2,770 lives. President Donald Trump was slated to hold a news conference about the virus Wednesday evening..
Investors don’t know how long the outbreak will last, and it is too early to determine to what degree it will hurt corporate earnings, but a number of companies, including Hasbro Inc. /zigman2/quotes/201249319/composite HAS +0.85% , HP Inc. /zigman2/quotes/203461582/composite HPQ -0.37% and Mastercard Inc. /zigman2/quotes/207581792/composite MA +2.98% , have already said that they think it will.