Dow plunges nearly 900 points, gives up gain for the year

Stocks fell sharply on Monday, with Dow Jones Industrial Average losses reaching more than 1,000 points. The number of coronavirus cases outside China surged, stoking fears of a prolonged global economic slowdown from the virus spreading.

The Dow traded 889 points lower, or 3.1%, after being down more than 1,000 points earlier in the day. The S&P 500 slid 2.9% while the Nasdaq Composite traded 3.3% lower. It was the biggest percentage drop for the S&P 500 since August and it was the biggest Dow point drop since February 2018. The Dow also gave up its gain for 2020.

“The second-largest economy in the world is completely shut down. People aren’t totally pricing that in,” said Larry Benedict, CEO of The Opportunistic Trader, adding a 10% to 15% correction in stocks may be starting. He also said some parts of the market, particularly large-cap tech stocks, appear to be over-owned. “It seems like there’s much more to come.”

Airline stocks Delta and American were both down more than 6.5% while United traded 3.3% lower. Shares of casino operators Las Vegas Sands and Wynn Resorts dropped at least 3.8% each. MGM Resorts slid 5%.

Chipmakers were also down broadly. Nvidia shares were down more than 6% while Dow-component Intel traded 3% lower. AMD dipped 6.4%. The VanEck Vectors Semiconductor ETF (SMH) was down by 3.9%.

“The market had been sanguine about the spread of the coronavirus,” said Quincy Krosby, chief market strategist at Prudential Financial. “That sanguine stance is being tested today.”

“Companies are assessing their suppliers and their supply chains and seeing whether or not their revenue is going to slow,” Krosby said. “Because of that, this has become a sell-first, ask-questions later type of market.”

Apple and its suppliers took a hit as well. Shares of the iPhone maker were down by 4.3%. Skyworks Solutions and Qorvo dropped more than 3% each.

Overseas markets fell sharply. The European Stoxx 600 dropped more than 3% while Korea’s Kospi index slid 3.9%.In Hong Kong, the Hang Seng index fell 1.8%.

Legendary investor Warren Buffett said the coronavirus spread has softened up the U.S. economy, but noted it its still healthy. “Business is down but it’s down from a very good level,” Buffett told CNBC’s Becky Quick on “Squawk Box.” “You look at car holdings —railcar holdings, moving goods around. And there again, that was affected by the tariffs too because people front-ended purchases, all kinds of things.” Buffett added he still recommends buying stocks for the long term...

- Source, CNBC, read more here