The Dow Jones dropped by 975 points as The Stock Market Tanks Due to Coronavirus Epidemic

As the Coronavirus epidemic continues, businesses, securities, and features are beginning to feel the impact. As the stock market opened on Monday, Feb 24, 2020, the Dow Jones Industrial Average tanked by about 975 points. Similarly, the S&P 500 was done by 2.3% while the Nasdaq-100 experienced a decline of 4%. As security prices decline, bond yields and oil prices were not left out as they experienced declines as well.

With the current decline, the Dow Jones is now in a bearish state for the year and its average has declined by 1.3% year-to-date. For the S&P 500, a decline of 0.4% was observed from the beginning of the year to date. However, the Nasdaq Composite is currently up by 3.3%, despite the current decline being experienced.

Statistics from the Volatility Index seems quite worrisome. The Volatility Index is a metric that attempts to measure investors’ fears of missing out. Current statistics show that the Volatility Index has risen by more than 6 points above the initial 23 point mark. The spike in the Volatility Index is attributed to the Coronavirus outbreak. Investors are worried that the impact of the outbreak on the stock market may be too much to bear, thus are being prompted to sell their shares.

Several reactions have trailed the stock market downtrend and attracted the attention of investors who paying close watch to know the next steps to take.

The chairman and CEO of Berkshire Hathaway, Warren Buffet disclosed that the outbreak of the coronavirus epidemic is not going to change his outlook on stocks as the economy still looks solid. He shared his view in an interview with Becky Quick saying, “Business is down but it’s down from a very good level.” He further said he believes Apple may be one of the best businesses in the world, however, bank stocks tend to be more attractive to investors when compared to other securities and features.

Analyst, Jim Cramer believes that there might be a turnaround and has advised investors to be on the lookout. He said the stocks of Micron (a Chip-making company) should be used to analyze the Chinese economy during the period of recovery from the impact of COVID-19. He further said that the shares of Micron is currently down by 3.5% and could become attractive once the outbreak is brought under control. “It has a huge amount of business in China, so watch Micron. If Micron turns, then you can make a case that maybe things indeed are better,” Cramer said.

Bespoke Investment Group believes that a huge sell-off today could trigger a recovery tomorrow. The firm said, “While the performance from the open to close on the day of a big gap down was generally weak, performance on the Tuesday after was ‘very positive’.”

Well, we’ll see how the market performs this week.