Dow closes down 1,000 points as coronavirus fears slam Wall Street

Wall Street was rocked in a volatile trading session on Monday that ended with the Dow Jones Industrial Average closing down 1,031 points — the worst day in two years for the blue-chip index, as fears increased over the global economic shock of coronavirus.

The market selloff came amid a significant uptick in reported cases of the disease in Europe, pushing investors to ditch stocks and buy up safe haven assets such as gold, which hit a seven-year high.

While the virus has already stalled the travel industry, shuttered factories in several countries, and slammed luxury goods retailers, casino operators, and tech companies, Monday's market reaction represented concern that stricter methods to control the spread of the virus would further throttle supply chains.

The disease has already choked Chinese production, bringing the world's second-largest economy to a standstill. After the outbreak spread to parts of northern Italy, there was concern that Milan, the country's financial epicenter, could also be hard hit. The Borsa Italiana, Italy's stock exchange, slid by 6 percent, its worst day in almost four years.

Monday's selloff came as South Korea raised the country's coronavirus alert to its highest level and Italy saw 130 new cases of the disease. While the World Health Organization stopped short of calling the outbreak a pandemic, it did note on Monday that the virus has "unlimited potential."

Scientists say the new virus, dubbed COVID-19, is both more easily transmitted and less deadly than the SARS epidemic, but much still remains unknown. As a result, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said, “Markets are now slaves to the news flow.”

Investor reaction to the wider spread of coronavirus led to a volume of trading so heavy that some clients even had difficulty accessing their accounts, CNBC reported.

“Due to higher-than-usual volumes, some clients may have experienced delays in accessing some online features as the market opened but our systems are fine and up and running,” Schwab Public Relations told CNBC. Fidelity, the largest online broker, said, “Some clients are experiencing technical issues and we are working as quickly as possible to resolve."

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Vice President Mike Pence bumps elbows with Washington Gov. Jay Inslee, left, during a news conference, Thursday, March 5, 2020, at Camp Murray in Washington state. Pence was in Washington to discuss the state's efforts to fight the spread of the COVID-19 coronavirus, and officials have been avoiding shaking hands to prevent the spread of germs. (AP Photo/Ted S. Warren)
In this image from video, provided by the California National Guard, airmen with the 129th Rescue Wing drop virus testing kits down to the Grand Princess cruise ship off the coast of California Thursday, March 5, 2020. Scrambling to keep the coronavirus at bay, officials ordered a cruise ship with 3,500 people aboard to stay back from the California coast Thursday until passengers and crew can be tested, after a traveler from its previous voyage died of the disease and at least two others became infected. The California National Guard 129th Rescue Wing lowered test kits onto the 951-foot (290-meter) Grand Princess by rope as the vessel lay at anchor off Northern California, and authorities said the results would be available on Friday. Princess Cruise Lines said fewer than 100 people aboard had been identified for testing. (California National Guard via AP)
A woman wears a face mask to protect against the COVID-19 (Coronavirus) after arriving at the LAX airport in Los Angeles, California on March 5, 2020. - California has declared a state of emergency as the number of novel coronavirus cases and deaths in the US continues to climb. (Photo by Mark RALSTON / AFP) (Photo by MARK RALSTON/AFP via Getty Images)
Empty containers for travel hand sanitizer are seen at a store following warnings about COVID-19 in Kirkland, Washington on March 5, 2020. - The US reported its first case of the disease in January and its first death on February 29 -- both in the state of Washington in the country's Pacific Northwest. Since then the toll has risen to 11 and the virus has spread to at least 14 states, infecting more than 180 people, according to an AFP tally. On Thursday, Washington state officials announced a jump in cases, from 39 to 70. Ten of the 11 deaths have been reported there, with the other in California. (Photo by Jason Redmond / AFP) (Photo by JASON REDMOND/AFP via Getty Images)
Mike Weatherill, holds a photo of his mom Louise Weatherill, 85, a resident of Life Care Center who died, speaks during a press conference held by family of residents of the nursing home, where some patients have died from COVID-19, in Kirkland, Washington on March 5, 2020. - The US reported its first case of the disease in January and its first death on February 29 -- both in the state of Washington in the country's Pacific Northwest. Since then the toll has risen to 11 and the virus has spread to at least 14 states, infecting more than 180 people, according to an AFP tally. On March 5, Washington state officials announced a jump in cases, from 39 to 70. Ten of the 11 deaths have been reported there, with the other in California. (Photo by Jason Redmond / AFP) (Photo by JASON REDMOND/AFP via Getty Images)
DENVER, CO - MARCH 5: Gov. Jared Polis speaks during a press conference to address the first confirmed case of Coronavirus in Colorado at the Colorado Department of Public Health and Environment on Thursday, March 5, 2020. Gov. Jared Polis said the first confirmed individual is a man in his 30s, who traveled to Italy last month and was recreating in Colorado. Polis added that the man's girlfriend, who was traveling with him has been quarantined. A second case was reported during the press conference, but no information was provided by Polis or the officials flanking him. (Photo by AAron Ontiveroz/MediaNews Group/The Denver Post via Getty Images)
Adilisha Patrom, owner of a co-working and event space next to Gallaudet University, organizes face masks, hand sanitizer and other supplies inside her pop up shop on Thursday, March 5, 2020, in Washington. Inside her storefront, she displays different face mask models and hand sanitizer bottles alongside information from the Centers for Disease Control and Prevention. (AP Photo/Nathan Ellgren)
In this March 4, 2020 photo, two women wear masks as they ride a subway train, in New York. Two more cases of the new coronavirus have been confirmed in New York City, raising New York state's total to 13, Mayor Bill de Blasio said Thursday. (AP Photo/Richard Drew)
A security guard wears gloves while holding a basketball during halftime of an NBA basketball game between the Los Angeles Clippers and Houston Rockets Thursday, March 5, 2020, in Houston. The NBA has told players to avoid high-fiving fans and strangers and avoid taking any item for autographs, the league's latest response in its ongoing monitoring of the coronavirus crisis. (AP Photo/David J. Phillip)
Vice President Mike Pence, left, bumps elbows with Maj. Gen. Bret Daugherty, right, Adjutant General of Washington State, before a tour of the Washington State Emergency Operations Center, Thursday, March 5, 2020 at Camp Murray in Washington state to discuss the COVID-19 coronavirus. Officials are avoiding shaking hands as a precaution against the virus. (AP Photo/Ted S. Warren)
Golden State Warriors fan Brandon Lai wears a mask because of the coronavirus outbreak before attending an NBA basketball game between the Warriors and the Toronto Raptors in San Francisco, Thursday, March 5, 2020. (AP Photo/Jeff Chiu)
A police officer wears a face mask inside El Alto airport in Bolivia, Wednesday, Feb. 26, 2020. With Brazil reporting the first case of the COVID-19 virus, neighboring countries and other nations around Latin America are attempting to block the possible arrival of the virus. (AP Photo/Juan Karita)
Passengers wear face masks to protect against the COVID-19 (Coronavirus) after arriving at the LAX airport in Los Angeles, California on March 5, 2020. - California has declared a state of emergency as the number of novel coronavirus cases and deaths in the US continues to climb. (Photo by Mark RALSTON / AFP) (Photo by MARK RALSTON/AFP via Getty Images)
Foreign diplomats wearing face masks attend at a briefing by South Korean Foreign Minister Kang Kyung-wha on the situation of the COVID-19 outbreak in Korea, at the foreign ministry in Seoul Friday, March 6, 2020. (Jung Yeon-je /Pool Photo via AP)
People wearing face masks walk through a subway station in Beijing, Friday, March 6, 2020. North Korea said Friday it has released several hundred foreigners from a quarantine imposed as part of its vigilant prevention efforts to avoid an outbreak of the coronavirus that has spread around the world. (AP Photo/Mark Schiefelbein)
A worker produces hand sanitizer at the Companhia Nacional do Álcool (CNA) factory in Piracicaba, Brazil, Tuesday, March 3, 2020. Last week the factory added a second shift of workers to produce more hand sanitizer, and while the CNA was never an exporter, it's considering that by adding a third shift. One week ago, Brazil confirmed Latin America’s first case of the new coronavirus. (AP Photo/Andre Penner)
A Child is seen wearing a mask inside an MTR Train on February 22, 2020 in Hong Kong, China. the coronavirus or Covid-19 which originated from Wuhan China has infected over 77,000 and killed 2361 worldwide to date. (Photo by Vernon Yuen/NurPhoto via Getty Images)
People wear masks to help guard against the Coronavirus on a street in downtown Tehran, Iran, Sunday, Feb. 23, 2020. Iran's health ministry raised Sunday the death toll from the new virus to 8 people in the country, amid concerns that clusters there, as well as in Italy and South Korea, could signal a serious new stage in its global spread. (AP Photo/Ebrahim Noroozi)
People wear masks to help guard against the Coronavirus in downtown Tehran, Iran, Sunday, Feb. 23, 2020. On Sunday Iran's health ministry raised the death toll from the new virus to 8 people in the country, amid concerns that clusters there, as well as in Italy and South Korea, could signal a serious new stage in its global spread. (AP Photo/Ebrahim Noroozi)
This Saturday, Feb. 22, 2020, photo released by Xinhua News Agency, shows medical workers in protective suits at a coronavirus detection lab in Wuhan in central China's Hubei Province. The fresh national figures for the disease that emerged in China in December came as the number of viral infections soared mostly in and around the southeastern city of Daegu, where they were linked to a local church and a hospital. (Cheng Min/Xinhua via AP)
Mary Cahill, left, leaves a news conference where officials discussed the proposal for housing coronavirus patients at the Fairview Development Center in Costa Mesa, Calif., Saturday, Feb. 22, 2020. A court temporarily blocked the U.S. government from sending up to 50 people infected with a new virus from China to the Southern California city for quarantine after local officials argued that the plan lacked details about how the community would be protected from the outbreak. (Mindy Schauer/The Orange County Register via AP)
Personnel carry new beds inside the hospital of Codogno, near Lodi in Northern Italy, Friday, Feb. 21,2020. Health officials reported the country's first cases of contagion of COVID-19 in people who had not been in China. The hospital in Codogno is one of the hospitals - along with specialized Sacco Hospital in Milan - which is hosting the infected persons and the people that were in contact with them and are being isolated. (AP Photo/Luca Bruno)
Una persona toma fotografías cerca del crucero Diamond Princess en cuarentena, en el puerto de Yokohama, cerca de Tokio, el viernes 21 de febrero de 2020. (AP Foto/Eugene Hoshiko)
A medic worker disinfects a room in the sanatorium after the quarantine period has ended in Bogandinsky in the Tyumen region, about 2150 kilometers (1344 miles) east of Moscow, Russia, Friday, Feb. 21, 2020. 144 people who were evacuated from the epicenter of the CONVID-19 coronavirus outbreak in Wuhan, China, were released from a 14-day quarantine in western Siberia. None of them tested positive for the virus. (AP Photo/Maxim Slutsky)
Un trabajador vestido con un traje de protección rocía desinfectante como precaución contra un coronavirus en una estación de metro de Seúl, Corea del Sur, el 21 de febrero de 2020. (AP Foto/Ahn Young-joon)
Workers wearing protective gears help clean each other's suits after disinfecting as a precaution against the coronavirus at a subway station in Seoul, South Korea, Friday, Feb. 21, 2020. South Korea on Friday declared a "special management zone" around a southeastern city where a surging viral outbreak, largely linked to a church in Daegu, threatens to overwhelm the region's health system. (AP Photo/Ahn Young-joon)
Un autobús con pasajeros del buque crucero en cuarentena Diamond Princess sale del puerto de Yokohama, cerca de Tokio, Japón, jueves 20 de febrero de 2020. Dos pasajeros ancianos han muerto, siendo las primeras víctimas fatales del nuevo virus en el buque. (AP Foto/Eugene Hoshiko)
China's Foreign Minister Wang Yi speaks during a joint press conference of the Co-Chairs Special ASEAN-China Foreign Ministers' meeting on the Novel Coronavirus Pneumonia in Vientiane, Laos, Thursday, Feb. 20, 2020. (AP Photo/Sakchai Lalit)
En esta fotografía publicada por la agencia noticiosa Xinhua, un farmacéutico procesa gránulos de la medicina tradicional china en el hospital provincial de Gansu especializado en este tipo de medicina, en Lanzhou, en la provincia noroccidental china de Gansu, el jueves 20 de febrero de 2020. La medicina tradicional china se ha utilizado ampliamente para combatir la enfermedad causada por el nuevo coronavirus. (Fan Peishen/Xinhua vía AP)
En esta foto distribuida por la embajada de Ucrania en China, una pasajera ucraniana hace una señal de victoria en el bus del aeropuerto al avión chárter que evacuará a unas 70 afectadas por el brote de un nuevo virus. Entre los evacuados hay 45 ucranianos y 27 personas de Argentina, República Dominicana, Costa Rica, Panamá, Israel y Ecuador. (AP Foto/Servicio de Prensa del Ministerio del Exterior de Ucrania)
Clinical support technician Douglas Condie extracts viruses from swab samples as analytic work continues to examine the genetic structure of a virus in the coronavirus testing laboratory at Glasgow Royal Infirmary, Glasgow, Scotland, Wednesday Feb. 19, 2020. The COVID-19 virus originally centred in China now has multiple cases confirmed worldwide. (Jane Barlow/PA via AP)
In this Monday, Feb. 17, 2020, photo released by Xinhua News Agency, patients infected with the coronavirus take rest at a temporary hospital converted from Wuhan Sports Center in Wuhan in central China's Hubei Province. China reported thousands new virus cases and more deaths in its update Tuesday on a disease outbreak that has caused milder illness in most people, an assessment that promoted guarded optimism from global health authorities. (Xiao Yijiu/Xinhua via AP)
In this Monday, Feb. 17, 2020, photo, volunteers make the handmade cotton masks in Hong Kong. Volunteers from a Hong Kong theater group are turning their backstage skills to helping out against the new coronavirus, sewing reusable protective masks for those who can't access or afford them. Jo Ngai, a drama lover and founder of the Nonsensemakers, along with her friend Jessie Han, have turned a theater rehearsal room into a temporary handmade mask factory. (AP Photo/Kin Cheung)
This undated electron microscope image made available by the U.S. National Institutes of Health in February 2020 shows the Novel Coronavirus SARS-CoV-2. Also known as 2019-nCoV, the virus causes COVID-19. The sample was isolated from a patient in the U.S. (NIAID-RML via AP)
In this Feb. 16, 2020, photo, runners, some wearing masks, compete in a Kumamoto castle marathon in Kumamoto city, western Japan. Organizers of the Tokyo Marathon set for March 1, 2020 are drastically reducing the number of participants out of fear of the spread of the coronavirus from China. The general public is essentially being barred from the race. (Kyodo News via AP)
En esta imagen del 17 de febrero de 2020, autobuses con pasajeros del crucero en cuarentena Diamond Princess salen de un puerto en Yokohama, cerca de Tokio. (AP Foto/Jae C. Hong, Archivo)
Family members of Pakistani students studying in Wuhan, China, hold a demonstration calling for the evacuation of their relatives after the Chinese city was badly hit by the coronavirus, in Karachi, Pakistan, Sunday, Feb. 16, 2020. (AP Photo/Fareed Khan)
A group of quarantined passengers exercise on the Diamond Princess cruise ship Saturday, Feb. 15, 2020, in Yokohama, near Tokyo. A viral outbreak that began in China has infected more than 67,000 people globally. The World Health Organization has named the illness COVID-19, referring to its origin late last year and the coronavirus that causes it. (AP Photo/Jae C. Hong)
SEOUL, SOUTH KOREA - FEBRUARY 23: In this handout image provided by South Korean Presidential Blue House, South Korean President Moon Jae-in speaks during a meeting about coronavirus (COVID-19) at a government complex on February 23, 2020 in Seoul, South Korea. South Korea reported 169 new cases of the coronavirus (COVID-19) bringing the total number of infections in the nation to 602, with the potentially fatal illness spreading fast across the country. (Photo by South Korean Presidential Blue House via Getty Images)
Japan's Prime Minister Shinzo Abe (L) attends a meeting at the new COVID-19 coronavirus infectious disease control headquarters at the prime minister's office in Tokyo on February 23, 2020. - Japan on February 23 confirmed the first case of a former Japanese passenger of a coronavirus-stricken cruise ship testing positive for the disease after initially receiving a clean bill of health. (Photo by STR / JIJI PRESS / AFP) / JAPAN OUT (Photo by STR/JIJI PRESS/AFP via Getty Images)
TAIPEI, TAIWAN - 2020/02/23: Commuters in the Taipei MRT system all wearing surgical mask as the 2019 Novel coronavirus that originated in China is spreading to other countries worldwide. Taiwan authorities fear a serious pandemic and people are advised to wear surgical masks especially when confined in small spaces such as public transports. (Photo by Alberto Buzzola/LightRocket via Getty Images)
WUHAN, Feb. 22, 2020 -- A staff member handles nucleic acid testing samples at a novel coronavirus detection lab in Wuhan, central China's Hubei Province, Feb. 22, 2020. Since its operation on Feb. 6, the novel coronavirus detection lab named "Huoyan", jointly constructed by the local government and other institutions, has tested tens of thousands of nucleic acid testing samples. For days, including the "Huoyan" lab, Wuhan's 40 NAT institutions together, have been able to test 14,000 NAT samples per day, zeroing the number of daily NAT from all possible coronavirus patients. (Photo by Cheng Min/Xinhua via Getty) (Xinhua/Cheng Min via Getty Images)
BEIRUT, LEBANON - FEBRUARY 22: Students wear masks to protect themselves from coronavirus as a precaution in Beirut, Lebanon on February 22, 2020. Lebanese Health Minister Dr. Hamad Hassan made a statement on first coronavirus case at the Rafik Hariri University Hospital. (Photo by Hussam Chbaro/Anadolu Agency via Getty Images)
A Lebanese nurse wearing a protective mask works at a ward where the first case of coronavirus in the country is being treated, at the Rafik Hariri University Hospital in the southern outskirts of the capital Beirut, on February 22, 2020. - Lebanon confirmed on February 21, the first case of the novel coronavirus, found in a 45-year-old Lebanese woman who had travelled from the holy city of Qom in Iran, while two other cases were being investigated. (Photo by ANWAR AMRO / AFP) (Photo by ANWAR AMRO/AFP via Getty Images)
SOUTHAMPTON, ENGLAND - FEBRUARY 22: An LED screen shows Southampton's support against the coronavirus during the Premier League match between Southampton FC and Aston Villa at St Mary's Stadium on February 22, 2020 in Southampton, United Kingdom. (Photo by Alex Broadway/Getty Images)
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The rate at which the virus was spreading in China appears to be slowing. An announcement of 409 new cases Monday was the fifth day in a row that the number of new daily cases had fallen below 1,000. Outside of China, though, a spate of outbreaks presented fresh cause for concern.

“The spike in infections in South Korea, mostly concentrated in the congregation of a single church, a surge in cases in Italy, and news of an outbreak in Iran, where the health care system is of uncertain quality and the government is secretive, has triggered fears that China's aggressive quarantining efforts won't keep the virus from spreading globally,” Shepherdson wrote in a client note.

“Global growth is likely to be impacted in a meaningful way due to fears of the coronavirus,” Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said.

The challenge investors face is that no one knows how long this epidemic will last, nor how dangerous it ultimately will be to populations.

“Stock markets around the world are beginning to price in what bond markets have been telling us for weeks,” Zaccarelli said. “Bond yields have continued to move lower, despite the fact that stocks quickly shrugged off the coronavirus risks last month,” he said, adding that this indicated that the stock market’s initial resilience was unlikely to last.

Nigel Green, CEO and founder of the deVere Group, predicted that markets could fall by as much as 10 percent — a possibility he said most investors are not yet pricing into valuations. “Many investors remain complacent about the far-reaching impact of coronavirus, which is continuing to spread — and a faster pace. This will inevitably hit financial markets,” he said. “In general terms, stocks have hardly been deterred by the coronavirus outbreak. This complacency is concerning.”

Green added that the virus was emerging at a time when many key global economies were already vulnerable. “Coronavirus has struck at a time when major economies, including Japan, Germany, India and Hong Kong are facing a downturn due to other factors such as the U.S.-China trade dispute and political protesters, which could hit the world economy,” he said.

“This threat to global growth is real and should not be ignored,” Zaccarelli said, but he added that — provided the United States stays out of recession — the virus impact will be unlikely to hurt the retirement goals of long-term investors.

“We will move past this challenge, and the economic expansion will continue in 2020,” he said.

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