The Dow just logged its worst 2-day percentage drop in two years

The U.S. stock-market rally is unraveling, with a period of historic gains coming to a screeching halt, as fear that the coronavirus epidemic may reach America rattles Wall Street. The Dow Jones Industrial Average DJIA, -3.15% was off 929.92 points, or 3.3%, at its Tuesday nadir, at 27,030.88, a day after the blue-chip benchmark suffered a drop of more than 1,000 points, representing the third worst one-day point drop in the index’s 124-year history.

The Dow finished Tuesday down nearly 880 points to mark its sharpest-ever two-session slide in point terms, losing about 1,910 points, according to Dow Jones Market Data. The fall also marked the largest two-day percentage slide for the index since the period ended Feb. 5, 2018. The skid puts the Dow 8.4% away from its Feb. 12 record-high close of 29,551.42. That means the Dow is approaching correction territory at 26,596.28, defined as a drop of at least 10%, but not greater than 20%, from a recent peak.

Meanwhile, the S&P 500 SPX, -3.03% and the Nasdaq Composite COMP, -2.77% finished sharply lower. The S&P 500 is off 7.6% from its recent record high on Feb. 19 and has shed nearly $1.74 trillion this week, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, in a Tuesday research note. The Nasdaq is off 8.6% from its Feb. 19 all-time closing high. Put another way, its recent decline is 1.4 percentage points from representing a correction. That would occur at the 8,835.46 level.

Bond investors fear that the coronavirus might result in a global economic slowdown that might wash up on U.S. shores as a full-fledged recession. MarketWatch economics writer Rex Nutting explained the potential for an uncontained outbreak of COVID-19 this way: “Much of the immediate economic impact of a pandemic can be traced to the efforts to contain it, rather than from the effects of the disease itself. As we attempt to quarantine those who might spread the disease, we shut down a lot of economic activity.”

The Dow just logged its worst 2-day percentage drop in two years — here are 5 reasons the stock market is tanking, and only one of them is the coronavirus, Marketwatch, Feb 26