US Market tanks into bear terrain

The US equity market finished session steep lower on Wednesday, 11 March 2020, after the World Health Organization classified the coronavirus outbreak as a pandemic and President Donald Trump announcement of travel ban from Europe to the United States for 30 days. Meanwhile, selloff pressure intensified after Goldman Sachs predicted the end of a long bull market. At closing bell, the Dow Jones Industrial Average stumbled 1,464.94 points, or 5.86%, to 23,553.22, while the S&P 500 sank 140.85 points, or 4.89%, to 2,741.38. The Nasdaq Composite Index declined 392.20 points, or 4.7%, to 7,952.05.

President Donald Trump announced that travel from Europe to the United States will be suspended for 30 days, beginning Friday at midnight. The suspension does not include the United Kingdom. Trump made the announcement during an address to the nation about the novel coronavirus outbreak. The coronavirus has infected more than 124,000 people and claimed nearly 4,600 lives worldwide, with market experts fearing that pandemic could disrupt global supply chains and drive the global economy into recession.

The World Health Organization said that with over 121,000 infections globally, the coronavirus that causes COVID-19 had become a pandemic. The WHO had characterized the illness, which broke out in Wuhan, China, late last year, as a series of epidemics.

Goldman Sachs set a midyear target of 2,450 for the S&P 500, which would be a 28% decline from the intraday record high of 3,393.52 set Feb. 19, citing after 11 years, 13% annualized earnings growth and 16% annualized trough-to-peak appreciation, we believe the S&P 500 bull market will soon end.

The novel coronavirus has taken a massive toll on global markets and economies. Both the S&P 500 and the Dow slipped into bear market territory defined as a drop of more than 20% from the most recent high. The benchmark index fell 19.2% from February 2019 intraday high through Wednesday's close.

Expectations that President Donald Trump would announce "major" support measures helped Wall Street claw back losses on Tuesday from a bruising sell-off at the start of the week on the back of a collapse in oil prices. But there have been no announcements, even as the administration discusses measures ranging from tax relief, loan guarantees, reimbursing workers for lost pay and support for the hard hit industries.

Boeing led the Dow lower with a brutal 18% decline after reports that the troubled aviation giant planned to draw the entire $13.8 billion credit line extended by a group of banks last month.

Nike Inc fell 6.5% after rivals Adidas and Puma flagged a sales hit in China due to the outbreak.

On the U.S. economic front, a report released by the Labor Department showed a modest increase in consumer prices in the month of February. The Labor Department said its consumer price index inched up by 0.1% in February, matching the uptick seen in January. Core consumer prices, which exclude food and energy prices, rose by 0.2% for the second consecutive month.

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