Panic over a Wuhan coronavirus pandemic sent stocks tumbling again on Friday morning, in what looks to be the worst week for financial markets since the 2008 financial crisis, which saw the Dow Jones Industrial Average fall 50 percent over several months from 2008-2009.
The S&P 500 fell 3.5 percent while the Dow Jones fell 1,059 points, roughly 4 percent, on Friday after trading began. The Nasdaq Composite fell 3.4 percent at the same time, and European markets shed between three and five percent. The S&P 500 has dropped more than 12 percent in the past week shortly after reaching record highs, erasing $3.4 trillion.
“We’re drinking from a fireman’s hose this morning,” Patrick Spencer, managing director at investment firm Baird, commented to the Wall Street Journal. “It wasn’t a good close last night and certainly panic ensued.”
Uncertainty over the spread of the outbreak was compounded again after the World Health Organization announced Friday that the risk of the coronavirus spread was “very high at global level.”
“It’s a different kind of an event because we’re reacting to what might happen, whereas in the [2008 financial] crisis we were reacting to what was actually going on in real time,” Peter Dixon, an economist with Commerzbank, told the Journal. “It’s almost impossible for investors and analysts to make any sensible predictions as to what might happen—we’re very much flying blind.”
The Trump administration has attempted to play down the severity of the outbreak. Acting White House chief of staff Mick Mulvaney, speaking at the Conservative Political Action Conference on Friday, recommended “turning the television off” when asked how the White House planned to stabilize markets.
“What I might do to calm the markets is turn the television off for 24 hours. This is not Ebola. It’s not SARS. It’s not MERS,” Mulvaney said.