Business Insider: The S&P 500 Suffers Its Quickest Correction Since the Great Depression

February 28, 2020

Article by Ben Winck in Business Insider

The S&P 500 slipped through the week to post its fastest correction since the Great Depression as fears of a coronavirus-driven recession tore into markets around the world.

The key index notched its biggest single-day drop since 2011 on Thursday after plunging 4.4%. The S&P 500 index wiped out its year-to-date gains after its Monday and Tuesday slumps and now sits 10.7% below where it closed December 31.

The index's rapid downturn has also pushed the S&P 500 to 14.5% below its February 19 high as of Friday morning. A market correction is officially defined as a 10% drop from an index's peak, leading the S&P 500 to easily surpass the bleak threshold. The six days of consecutive declines established the correction as the index's fastest since July 1933, when the S&P 500 plummeted 13.3% in two days, The Financial Times reported.

US stocks stood at record highs just last week as investors shrugged off initial reports of the coronavirus' escalation. Yet a spike in deaths outside China on Monday prompted new fears of the outbreak damaging the global economy. The S&P 500 tumbled throughout the week as the number of virus cases rocketed higher.

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The index's steep declines pushed investors out of equities and into traditionally defensive assets. Treasury yields hit several record-lows, while gold gained early in the week before a modest slump.

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