Stocks Plunge To Start Second Quarter As U.S. Tops 200,000 Coronavirus Cases

Topline: The stock market plunged on Wednesday, marking a dismal start to the second quarter as coronavirus continued to take a toll on the economy, and a slate of bad news related to the pandemic caused concern on Wall Street.

• The Dow Jones industrial average lost 4.4%, almost 1,000 points, on Wednesday, while the S&P 500 and Nasdaq Composite also fell by 4.4%.
• All three major averages hit their session lows in the final hour of trading, amid a slate of bad news related to coronavirus—with investors fearing that the country could remain shutdown for longer than expected.
• The number of confirmed cases in the U.S. officially surpassed 200,000 for the first time—doubling since last Friday, as the outbreak continues to spread to more cities across the country. 
• The grim news followed remarks from President Trump on Tuesday evening, who warned that the U.S. should prepare for a “very, very painful two weeks” ahead; White House officials project between 100,000 and 240,000 Americans will die from the coronavirus.
• A slate of recent economic data is also beginning to show the negative impact of the virus on the U.S. economy, worrying investors on Wall street:  Both manufacturing and consumer confidence contracted in March, while last week saw a record number of jobless claims. 
• On Tuesday, DoubleLine Capital CEO Jeffrey Gundlach predicted that the coronavirus market sell-off will worsen again in April, with the market bottoming lower than it did during the worst of the sell-offs in March.

Tangent: The market’s sharpest declines on Wednesday were in utilities and real estate stocks—both sectors dropped over 6%, with banks not far behind. The consumer staples sector held up the best, only dropping 1.8%.

Key background: The Dow and S&P 500 fell 1.8% and 1.6%, respectively, on Tuesday—closing out their worst first quarters performances ever. The Dow fell more than 23%—its biggest quarterly decline since 1987, while the S&P 500 fell more than 20% for its biggest quarterly loss since 2008. Both indexes were down over 10% in March.

Crucial quote: Stocks started April on a downbeat note with the major indices sliding across the board,” describes Vital Knowledge founder Adam Crisafulli. Although there “wasn’t any one specific driver behind the selling,” he says that the “corona-related news flow has turned a bit more somber in the last 36 hours,” which can help explain stocks moving lower. At this point, Crisafulli says, “economic data, earnings, and stimulus announcements are all subordinate to science… stocks care much, much more about transmission trends and treatment efficacy.”