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Dow falls 1,191 points -- the most in history

A stock market correction, or a 10% decline from a recent high, can scare investors. CNN's Christine Romans explains why corrections are part of a healthy market.

Posted: Feb 27, 2020 1:03 PM
Updated: Feb 27, 2020 3:45 PM


US stocks again sold off sharply on Thursday as worries about coronavirus mounted. The S&P 500 posted its worst day since August 18, 2011, and the three main indexes fell into correction territory. Stocks are on track for their worst week since the financial crisis.

The Dow dropped 1,191 points, or 4.4% in its worst one-day point drop in history. The index has fallen more than 10% below its most-recent peak, putting it in correction.

The S&P 500 closed down 4.4% and finished the day below the 3,000 point mark. The index is also in correction territory.

The Nasdaq Composite ended down 4.6%, more than 10% below its latest peak.

All three indexes are on track for their worst week since the fall of 2008, the midst of the financial crisis.

In the United Kingdom, the FTSE 100 also fell into correction territory Thursday. This is the market's first correction since December 2018.

Stocks still aren't all that close to a bear market, which is defined as 20% or more below the most recent peak. The S&P 500 is 12% below its peak.

Global equities have been selling off around the world all week as investors fret about the spread of the virus. In the United States, stocks spent all of Thursday in the red, despite a short-lived rebound around midday during which the S&P and the Nasdaq briefly emerged from correction.

'The game has changed with Italy and also with the new case in California,' said Keith Buchanan, portfolio manager at GLOBALT Investments, in reference to the latest coronavirus cases.

That said, investors would do well to remember that a '10% pullback after the kind of run US equities have been having is not the worst scenario,' Buchanan said.

Still, safe haven investments like bonds are up on Thursday and the 10-year US Treasury yield fell to a new all-time below 1.28%. Bond yields and prices move in opposition to each other.

In the energy space, US oil prices fell yet again as investors worries about a drop in demand. US oil futures settled down 3.4% at $47.09 a barrel.

Worries about the coronavirus outbreak mounted this week, with the US Centers for Disease Control and Prevention saying it expects cases in the United States to rise. The virus has now infected more than 82,000 people worldwide, with the vast majority of cases in China.

Corporations continue to warn that they won't meet their first quarter earnings targets. Microsoft announced that late Wednesday. Goldman Sachs said in a report Thursday that it now thinks US companies will generate zero earnings in 2020.

'What's even more disconcerting is that the news headlines haven't been all that bad yet,' said Paul Hickey of Bespoke Investment Group. 'Right now, it's the fear of what could happen that's driving the markets rather than what is actually happening.'

Indeed, the US economy is thought to be relatively more resilient against the effects of the virus as it is not as reliant on trade as its peers. The second reading of fourth quarter GDP left growth unchanged at 2.1%.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 333357

Reported Deaths: 7089
CountyConfirmedDeaths
Los Angeles1363573824
Riverside25748550
Orange25255424
San Diego19929422
San Bernardino19502307
Fresno828288
Imperial7977136
Alameda7976148
San Joaquin698870
Kern660198
Santa Clara6542167
Tulare5942152
Sacramento571483
Stanislaus497351
Contra Costa485290
San Francisco459050
Ventura424653
San Mateo4045112
Santa Barbara393131
Marin370232
Kings297039
Monterey279018
Solano207528
Merced188412
Sonoma181916
Placer111411
San Luis Obispo10065
Yolo92928
Madera8938
Santa Cruz5693
Napa5184
Lassen4280
Sutter4034
San Benito3622
Butte3384
El Dorado3070
Shasta2006
Yuba1983
Glenn1760
Humboldt1654
Nevada1631
Mendocino1320
Lake1211
Colusa1130
Tehama1071
Tuolumne730
Calaveras670
Del Norte610
Mono521
Siskiyou410
Amador400
Inyo351
Mariposa321
Plumas190
Alpine20
Trinity20
Sierra10
Unassigned00
Chico
Few Clouds
93° wxIcon
Hi: 99° Lo: 66°
Feels Like: 93°
Oroville
Clear
95° wxIcon
Hi: 100° Lo: 66°
Feels Like: 95°
Paradise
Few Clouds
93° wxIcon
Hi: 92° Lo: 67°
Feels Like: 93°
Chester
Clear
89° wxIcon
Hi: 86° Lo: 60°
Feels Like: 89°
Red Bluff
Clear
99° wxIcon
Hi: 102° Lo: 69°
Feels Like: 99°
Willows
Few Clouds
93° wxIcon
Hi: 102° Lo: 62°
Feels Like: 93°
Tuesday was another hot day for northern California, but a slight shift in our weather pattern Wednesday will make it hotter for everyone.
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