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US Stocks Plunge 1,190 Points as Coronavirus Fears Force Four-Day Dive

© AP Photo / Richard DrewTrader Peter Tuchman works on the floor of the New York Stock Exchange, Friday, Dec. 28, 2018.
Trader Peter Tuchman works on the floor of the New York Stock Exchange, Friday, Dec. 28, 2018.  - Sputnik International
US stocks took another dive on Thursday, closing the day more than 1,100 points in the red as massive sell-offs continue over prolonged fears of the COVID-19 coronavirus’s effects on the global economy.

The Dow Jones Industrial Average Index wrapped the day with a loss of 1,190.95 points and the S&P 500 with a 137.63-point loss. The Nasdaq Composite fell by 414.30 points.

The latest figures come as investors grow increasingly worried about the effects that the coronavirus may have on the US economy, especially in the event that more cases emerge throughout the Land of the Free and begin to disrupt the daily routines and consumer spending of Americans.

“We’ve hit a pocket of fear,” Gregory Faranello, head of US rates trading at AmeriVet Securities, told CNBC. “This is a big deal … If this flows into the US, we could be in trouble, because, let’s face it, the US consumer is what’s holding this thing together.”

Thursday’s closing puts this week’s losses at over 3,000 points.

Falling in line with iPhone maker Apple, Microsoft and Budweiser brewer Anheuser-Busch InBev were the latest among other companies to note that coronavirus-linked disruptions would be preventing them from meeting quarterly revenue forecasts.

Tom Hainlin, global investment strategist at Ascent Private Capital Management, told CNBC that the emergence of the COVID-19 coronavirus has left investors “extremely cautious in the short term.”

“No one really seems to be an expert on the coronavirus. … We haven’t seen anything like this really in our investing lifetimes,” he noted.

In a Thursday report to clients, investment banking giant Goldman Sachs revised its earnings estimate for US companies in 2020, predicting instead that they will not see any growth for the year as a result of the coronavirus outbreak. 

“Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,” David Kostin, chief US equity strategist for the company, wrote in the report.

Kostin later noted in the update that “a more severe pandemic could lead to a more prolonged disruption and a US recession.”

Roughly two hours before the bell was sounded off for the day, California’s Democrat Gov. Gavin Newsom held a news conference, revealing that a total of 33 people had tested positive in the Golden State for the COVID-19 coronavirus. More than 8,400 people are being monitored in the state for possible infections.

As of Thursday, there have been more than 82,500 confirmed COVID-19 cases, with over 78,000 reported in mainland China, according to the Johns Hopkins University Center for Systems Science and Engineering. Although more than 33,000 individuals are documented as having “recovered” from the disease, COVID-19 has claimed the lives of some 2,810 persons.

In a bid to ease COVID-19 fears, US President Donald Trump addressed the American public on Wednesday and stressed that Washington will “spend whatever is appropriate” to combat the potential increase in coronavirus cases within US borders. At the briefing, Trump also revealed that US Vice President Mike Pence, who has previously been criticized for his handling of Indiana’s HIV outbreak, would be leading the coronavirus task force.

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