Wednesday was another ugly day on Wall Street after the World Health Organization declared the coronavirus outbreak a pandemic, combined with investors' apparent nervousness about the White House's response.
The Dow Jones industrial average dropped another 5.9%, shedding 1,465 points. The Nasdaq Composite Index and S&P 500 were both 5% lower.
European markets were also down, but with much less damage. Stocks in London were off 2% while French and German indexes fell less than 1%.
Less demand for travel because of the virus also helped drive down world oil prices. Stocks of airlines and cruise ship lines have also been taking a beating.
The Dow is now officially in what financial experts call a bear market, commonly defined as when stock prices drop at least 20% from a 52-week high. This ends the record-long bull market, which started in March 2009.
Wednesday’s sharp drop in the Dow came a day after a 4% gain, and experts said investors could expect many more up and down days.
They blamed the roller-coaster ride in part on investor expectations about details of a virus-related economic stimulus package from the Trump administration.
U.S. Treasury Secretary Steven Mnuchin told lawmakers Wednesday that the administration was considering some form of tax relief for individuals and small businesses that he said could put as much as $200 billion back into the U.S. economy.
But with Congress split between a Democratic House and a Republican president and Senate, experts said investors were nervous about whether anything would be passed.
Market strategists are again giving their clients the traditional advice they issue when markets go sour: Keep your head, don't sell low, diversify, keep your eye on a long-term investment strategy and ride it out.
