How bad is the coronavirus-sparked stock-market selloff? — the Dow industrials weekly skid would rank within its top 15 in its 124-year history

It has been an ugly week for bulls on Wall Street, that much is certain.

However, the depth of the slide for stocks this week can perhaps best be illustrated by the severity of the weekly skid for the 124-year-old Dow Jones Industrial Average. DJIA, -4.42%, with stock markets relinquishing gains from earlier in the year on the back of uncertainty over the spread of the COVID-19 outbreak.

Fears sparked by the outbreak of the infectious disease that originated in Wuhan, China late last year, is putting one of the oldest stock-market gauges on pace for its worst weekly skids on record.

Check out: Stocks keep getting slammed because investors fear a ‘supply shock’ that central bankers can’t fix

At last check, the decline would rank within the top 20 for the Dow’s steepest weekly selloffs, with a drop of 9.18%, according to FactSet data. The worst week for the Dow was the 18.15% drop during the period ended Oct. 10, 2008, according to Dow Jones Market Data and data from FactSet.

Periods of Dow’s worst weeks (week ended)Weekly % Change
1) Oct. 10, 2008-18.15
2) July 21, 1933-15.55
3) Sept. 21, 2001-14.26
4) May 17, 1940-14.21
5) Nov. 8, 1929-13.52
6) Oct. 23, 1987-13.17
7) April 8, 1932-12.86
8) Oct. 7, 1932-12.42
9) Sept. 16, 1932-11.93
10) Oct. 2, 1931-11.82
11) Dec. 22, 1899-11.35
12) Nov.19, 1937-11.24
13) June 20, 193011.12
14)Feb. 27, 2020 11.13
15)May 27, 193210.95
Source: Dow Jones Market Data

It also would rank as one of the worst weeks for the other benchmarks too. With the S&P 500 SPX, -4.42% and the Nasdaq Composite Index COMP, -4.61% headed for their worst weeks since the 2008 financial crisis, when markets were rocked by the creation of complex mortgage securities that spread across the globe.

This time the spread of the new coronavirus, a family of viruses similar to SARS, or severe acute respiratory syndrome, has injected a level of complexity into markets that is unsettling what had been predominantly bullish sentiment on Wall Street.

The S&P 500 index’s 10.8% weekly decline also puts it at among the 20 worst weekly slumps for the index thus far. Here’s the weekly performance for the benchmark’s 11 sectors, in attached chart:

The S&P 500’s decline from its record high also ranks as its fastest such reversal on record, Deutsche Bank analysts point out.

Meanwhile, the Nasdaq Composite is on pace for a weekly decline of great than 10.55%, which would rank this weeks drop as the 7th worst of its nearly 50-year history, with a drop ended April 13, 2000, off 25.3%, represent the worst weekly skid.

Read: Here’s how the 30 Dow industrials companies are prepping for the impact of the coronavirus

The viral outbreak has analysts at Goldman Sachs slashing its outlook for S&P 500 corporate earnings in 2020, with the investment bank no forecasting “no earnings growth” this year, as fears over the potential negative impacts of the coronavirus outbreak intensifies.

To be sure, the best course of action for investors may be to just bide their time and consult their financial advisers, with the knowledge that markets tend to go up over long periods.

Read: Dow slides into correction territory as stocks remain under pressure on coronavirus fears

Important read: Coronavirus case tally: 82,550 cases, 2,810 deaths

Source: Read Full Article