U.S. stocks plummeted on Thursday in a day of chaotic trading as investors sought shelter from potential economic consequences of coronavirus.
The Dow Jones Industrial Average fell 4.4 percent, about 1,190 points. The Nasdaq Composite tumbled 4.6 percent. The S&P 500 declined 4.4 percent.
It was the biggest one-day point drop in the history of both the Dow and the S&P, although far from the largest decline in percentage terms. As the indexes rise over time, each point up or down represents a smaller movement.
All three indexes are down for the year and 10 percent below their recent highs, a decline that many market watchers consider the official sign of a market “correction.” The Dow has lost 11 percent in just three days, putting the blue-chip index on a path for the worst week since the financial crisis. For the S&P 500, it was the swiftest plunge into correction territory from an all-time high since at least 1980, the Wall Street Journal reported.
Despite those declines, the S&P is only down 7 percent since the start of the year and is currently trading at levels seen last October. The Nasdaq is down about 4.5 percent for the year.
Goldman Sachs put out a note on Thursday saying U.S. companies would see no earnings growth at all due to the coronavirus outbreak.
“US companies will generate no earnings growth in 2020,” David Kostin, Goldman Sachs’ chief U.S. equity strategist, wr0te in a note to clients. “Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty.”
Global companies based in the U.S. have been warning investors that they expect sales in China to plummet and anticipate challenges from supply-chain disruptions as China struggles to get its production back up after the coronavirus devastation and strict quarantines that closed many businesses and kept workers at home.
Microsoft and Apple were the two worst-performing stocks on the Dow, dropping 6.9 and 6.3 percent respectively. Microsoft warned Wednesday that it would not meet its sales guidance for a key personal computing unit that includes the Windows operating system. Apple announced last week that it would fall short of its revenue guidance.
The best performing Dow stock was 3M, which makes surgical masks and respirators. It gained about nine-tenths of a percentage point.