US stocks plummet into correction territory on coronavirus fears — and the S&P 500 is headed for its worst week since the 2008 financial crisis

Reuters / Brendan McDermid

• All major US equity indices plunged Thursday, with the S&P 500 and Dow Jones industrial average entering correction territory. That means they’ve both fallen more than 10% from recent highs.
• A Stoxx Europe 600 also entered correction territory. 
• The sell-off comes amid worsening news surrounding the ongoing coronavirus outbreak.
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The coronavirus-driven stock sell-off hit a critical benchmark Thursday as all major US equity indices entered correction territory, indicating that they’ve fallen more than 10% from recent highs.

It marks the first correction for US stocks since December 2018. The S&P 500 is currently on track for its worst weekly decline since the 2008 financial crisis.

The latest leg down comes after the CDC warned on Wednesday that coronavirus is at risk of community spread. A California patient contracted the virus and had traveled to exposed regions or knowingly made contact with someone who had the virus, according to the CDC. 

The World Health Organization also said Thursday that the outbreak could become a pandemic. The fast-spreading disease has already killed 2,800 and infected 82,000.

Here’s how major US indices are trading mid-morning:

S&P 500: -1.60%, down as much as 3.5% at intraday lows

Dow Jones industrial average: -1.70%, down as much as 3.6%

Nasdaq Composite: -2.03%, down as much as 4%

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Further, the Stoxx Europe 600 entered correction territory as well Thursday, down more than 10% from its February 2019 high.

Elsewhere in markets, yields on the 10-year Treasury note hit a record low as investors fled to safety. Oil prices have also unraveled amid the global risk-off environment, hitting their lowest level in 12 months.

The warnings from major Wall Street institutions have been fast and frantic. Goldman Sachs warned on Thursday that the S&P 500 could quickly fall another 7% from Wednesday’s close, and also forecasted flat profit growth for US firms throughout the rest of 2020.

Strategists at Citigroup and RBC Capital Markets have even gone as far as to warn of a possible equity bear market – one that would derail the S&P 500’s nearly 12-year expansion.

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