Wall Street's roller coaster week continues: March 11, 2020
US stocks sold off sharply on Wednesday, with the Dow falling into a bear market.
That means the Dow fell 20% below its most recent high.
The Dow finished 1,465 points, or 5.9%, lower. At its low-point of the day, the index was down 1,690 points.
Stocks erased all of Tuesday’s gains. Coronavirus fears again weighed on markets, as the World Health Organization designated the global outbreak a pandemic.
The S&P 500 fell 4.9%. The index briefly fell into bear market territory in afternoon trading.
The Nasdaq Composite closed down 4.7%.
The New York Federal Reserve promised Wednesday to inject tens of billions of additional dollars into the financial system in hopes of easing coronavirus pressures rocking Wall Street.
It marks the second ramp-up by the NY Fed in the past three days.
The NY Fed said it will now offer at least $175 billion in its daily overnight repo operations. That's up from at least $150 billion that was announced Monday and at least $100 billion before that.
And the NY Fed will now offer one-month repo operations of at least $50 billion.
Officials cited the coronavirus pandemic, which has hit Wall Street firms and forced some employees to work remotely.
The moves should "help smooth functioning of funding markets as market participants implement business resiliency plans in response to the coronavirus," the NY Fed said in a statement.
Translation: the Fed doesn't want borrowing costs to spike during the ongoing market mayhem. That's what happened last fall, setting off alarm bells on Wall Street.
Biotech Gilead Sciences (GILD), which is testing its remdesivir drug in human patients, was up more than 1%. The World Health Organization has previously said that the antiviral vaccine might be the best hope to contain COVID-19.
Insurance brokers Wills Towers Watson (WLTW) and Aon (AON), cloud software firm Citrix (CTXS), web content management firm Akamai (AKAM) and wireless giant T-Mobile (TMUS) were the only other S&P 500 stocks higher in late afternoon trading.
The Dow fell into bear-market territory, dropping more than 20% from its most recent peak, which it reached on February 12.
The index was last down 1,390 points, or 5.6%, Wednesday.
The S&P 500 fell 5.1%, and the Nasdaq was down 5%.
Starbucks (SBUX) employees who have been diagnosed with, exposed to or had close prolonged contact with someone who has coronavirus can now claim up to 14 days of catastrophe pay, the chain said in note to employees Wednesday.
"I want you to know that here at Starbucks, you should never have to choose between work and taking care of yourself," wrote Rossann Williams, who leads company-operated business in the United States.
Employees don't need to show symptoms to take advantage of the expanded policy, she added. If they can't come back to work after 14 days, employees may qualify for more paid leave.
Starbucks previously announced that it will make its March 18 annual shareholder meeting a virtual gathering in light of the outbreak. Starbucks is based in Washington state, where at least 273 cases of coronavirus have been reported.
Stocks continue to plunge due to fears about the coronavirus outbreak and there seems to be no end in sight to the market panic. If this keeps up, the Dow could soon find itself in bear market territory -- 20% off a recent high. The S&P 500 and Nasdaq aren't far behind.
Here's where the three most widely watched market indexes stand as of mid-afternoon Wednesday -- and what they need to close at in order to be considered in a bear market.
The World Health Organization officially designated the global coronavirus outbreak a pandemic on Wednesday. The disease has infected 118,000 people across the world.
Even though switching the label from epidemic to pandemic doesn't change the numbers, stock sold off further in the early afternoon.
The Nasdaq Composite was down 3.9%.
As stocks continue to fall, investors have got to keep a clear head.
"What we're actually telling clients to do is to stay calm and to stay invested," Katie Koch, co-head of Goldman Sachs Asset Management, told Alison Kosik on the CNN Business' digital live show Markets Now.
While the reflex might be to sell as soon as the market flashes panic, timing the best points is to cash out is difficult. That's why it's important for investors to stay put.
"It's very possible that we will have an economic contraction," Koch said. But the economy moves in cycles, so investors shouldn't panic.
Many people came into the virus outbreak with a balanced portfolio consisting of stocks and bonds, Koch said. The recent selloff might be a good point to rebalance these portfolios and add some cheap stocks, Koch said.
Sectors of interest right now are health care, including biotechnology, as well as consumer companies, she said.
"We're a big believer in the long-term spending power of the millennial consumer," Koch added. "They have a perpetual desire for experience over things."
Watch the interview here: