It Took Just Two Days to Zap More Than $1 Trillion From Stocks
Comeuppance has been swift for a market that has occasionally seemed indestructible. In just two days, U.S. stocks have lost more than $1 trillion in value.
Gone is a year-to-date gain in the S&P 500 that only five days ago had swelled to nearly 5%. Where once the Nasdaq Composite Index was heading for its best February in two decades, now it’s barely green for the month. The VIX hasn’t been this high since the Christmas Eve meltdown of 14 months ago.
Not that any of the moves are outrageous by historical standards, and each can be fitted to a context that diminishes its sting. While $1.3 trillion has been carved out of equities, the number compares with $6 trillion that was added in 2019, the most for any year ever.
The S&P 500 fell 3.7% as of 1:15 p.m. in New York Monday, while the Nasdaq 100 plummeted 4.1%, headed for the worst day since October 2018. After enjoying weeks of calm in which retail investors piled in and institutions bought every dip, concerns over the spreading coronavirus gripped financial markets, forcing a reassessment of what the fallout could mean for the global economy and corporate profits.
Who knows if the worst is over.
“There’s an overhang of uncertainty over the market that we haven’t seen in a long time and it’s a little scary,” said Alec Young, managing director of global markets research at FTSE Russell. “My advice to people would be to let the dust settle.”
— With assistance by Vildana Hajric
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