World stock markets fell sharply Wednesday, and Wall Street watched as fears of the economic fallout from the coronavirus pandemic put the economy in a choke hold.
As the Dow Jones Industrial Average hit the bear market level, U.S. markets experienced a loss of at least 20% from the recent record high. The World Health Organization broke the news Wednesday afternoon that they were officially classifying the outbreak of a new coronavirus as a pandemic.
President Trump announced that he is poised to address the nation Wednesday evening, and it is unclear how the proposed tax holiday and stimulus package the White House says it plans to offer will help the economy. As Bloomberg reported, Trump made no mention of an economic stimulus package Wednesday afternoon before the close of the trading day.
Investors were experiencing the latest twist Wednesday, with the Dow Jones industrial dropping 1,600 points, 6.4%, as investors await broader response to economic damage from coronavirus. That follows the biggest loss since 2008 on Monday and a significant rebound Tuesday.
If the Dow closes with a loss of 1,000 points — or a gain given the dramatic intraday moves the market has seen — it would be the seventh such move since the stocks hit their most recent high on Feb. 19. Before then, the Dow had only rose or fell 1,000 points three other times in history, all in 2018.
Granted, swings of 1,000 points aren't as dramatic given the high levels of the market. The biggest percentage move in the Dow remains the 22.6% drop on Black Monday in 1987. As far as points go, the move was just 508.
Asian shares have declined but European indexes have opened higher as governments ramp up aid for economies reeling from the virus outbreak. Paris and London rose while benchmarks in Japan, China, Australia and South Korea fell.
The Bank of England cut its key interest rate by half a percentage point to 0.25% as an emergency measure in response to the outbreak of the virus.The central bank of Great Britain said the move would support businesses and consumer confidence.
Hopes rose, faded and then rose again Tuesday on Wall Street that the U.S. government will take effective measures to help reduce disruptions to the economy and to livelihoods from the outbreak as it spreads.
President Donald Trump has pitched his proposed payroll tax break on Capitol Hill as pressure mounts on the administration and Congress to work more vigorously to contain the coronavirus outbreak and respond to the financial fallout.
Trump's economic team joined Tuesday in presenting the economic stimulus package privately to wary Senate Republicans. They've been cool to additional spending at this stage.
Democrats are preparing their own package of low-cost virus testing, unemployment insurance and sick pay for workers struggling to keep paychecks coming as the outbreak disrupts workplaces.
Wild swings in the U.S. stock markets have become the norm the past three weeks. Since February 24, the Dow has closed up more than 1,000 points three times and down more than 1,000 points three times. That includes the largest one-day point gain in history (1,293.96) on March 2 and the largest single-day point loss in history (2,013.76) on Monday.
