On Wednesday’s historic trading day, the Dow officially dropped into a bear market.
A bear market is defined as 20% below the most recent high. By the end of the day, the Dow was 5.9% lower, losing 1,465 points. These losses negated the big gains from Tuesday. The significant losses were attributed to the growing fears of the coronavirus as it continues to march across the country and disrupt the lives of many. The drop into a bear market came on the heels of the World Health Organization declaring the global outbreak a pandemic.
The S&P 500 briefly dipped into bear market territory before recovering slightly, finishing the day down 4.9%. The Nasdaq ended the day down 4.7%.
One of the hardest hits industries on the stock market over the last few weeks has been the cruise sector. By the end of Wednesday’s sell-off, Carnival (CCL) had lost 60% of its value since the beginning of the year. Royal Caribbean (RCL) is down 67% in 2020 with Norwegian Cruise Line (NCLH) losing 75% of its market value.
As a result of Wednesday’s vast losses, the New York Federal Reserve promised that it would pour billions of dollars into the financial system in an effort to boost Wall Street.
In other financial news, a representative from the oil industry indicated that they did not need a bailout for the American government. Mike Sommers, the CEO of the American Petroleum Institute, said they had no interest in financial help.
Despite all of the doom and gloom, Citi (C) CEO Michael Corbat said that this is not a financial crisis, noting that the banks are still in solid shape and ready to weather the storm. On Wednesday afternoon, CEOs of some of the country’s biggest banks met with President Donald Trump at the White House.