S&P 500 takes $1.7 trillion coronavirus two-day hit
Coronavirus is not a reason to sell stocks, say experts
Investors are not taking any chances when it comes to the coronavirus.
The Dow Jones Industrial Average and the S&P 500 both registered the largest two-day point drop on record through Tuesday, per the Dow Jones Market Data Group, as the coronavirus spreads across the globe.
Tuesday's drubbing clipped 3 percent from the Dow and S&P 500 and just under that for the Nasdaq Composite.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 39512.84 | +125.08 | +0.32% |
| SP500 | S&P 500 | 5222.68 | +8.60 | +0.16% |
| I:COMP | NASDAQ COMPOSITE INDEX | 16340.868593 | -5.40 | -0.03% |
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The selling, which took place on the highest U.S. trading volume day of the year, wiped $1.7 trillion in value off the S&P 500, according to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. Since last Wednesday’s stock market highs, Silverblatt estimates $2.138 trillion has been evaporated.
Heavy volume, up or down, signals conviction and came after U.S. health officials told the American public to prepare for a rise in cases in the country.
"The president has insisted on radical transparency. That's what CDC and NIH were doing today is making sure that the American public know we've aggressively contained this for the moment, but given what's happening in the world, we'll probably see more cases here. We'll probably see community spread of the disease, but we actually have the tools to deal with that," said Health and Human Services Secretary Alex Azar during an interview with Lou Dobbs on FOX Business Tuesday evening.
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Although volatility is extreme, with the so-called fear index, the VIX, hitting the highest level since August, seasoned professionals such as Federated Hermes CIO of Global Affairs Stephen Auth, are buying selectively amid the downtrend.
"The global economy will bounce back from this, at worst it is a short term hit," he said during an appearance on FOX Business' "The Claman Countdown."
Additionally, Fidelity and Charles Schwab are among the firms advising Main Street investors to stay calm and invested.
"In times of market volatility, it's important for investors to keep their long-term plan in mind and understand the meaning of portfolio diversification," Charles Schwab tweeted.
At Fidelity, in a chart shared with FOX Business, the firm reminds clients that pulling money out in times of volatility is a lose-lose.
"Looking back at the performance of the S&P 500 since 1980, an investor who missed out on only the five best-performing days would have ended up with a stock portfolio worth roughly 35 percent less than one that had been fully invested throughout the period," the firm cautions.
Hypothetical Growth of $10,000 Invested in the S&P 500® from Jan 1, 1980 – Oct 31, 2008 (Source: Fidelity)
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