Posted in: Market News
Published:
January 24, 2020 5:13 PM UTC

This Is Why the Dow Jones Suddenly Plunged More than 250 Points

After opening to substantial gains, the Dow Jones suddenly plunged more than 250 points. Here's what catalyzed the stock market's nosedive.

  • The Dow Jones Industrial Average (DJIA) opened to triple-digit gains.
  • Midway through the morning session, the Dow nosedived more than 250 points.
  • Here’s what sparked the stock market’s sudden reversal.

After suffering three straight losses, the Dow Jones appeared determined to end the week on a high note.

The index rose more than 100 points when the market opened, but a sudden reversal tied to new developments in the coronavirus outbreak sent the Dow and entire U.S. stock market into decline.

More U.S. Coronavirus Cases Expected

The Dow’s fortunes reversed after the Centers for Disease Control and Prevention confirmed a second U.S. case of coronavirus.

Health officials maintain that the “risk to the U.S. public is low at this time” but revealed that they are currently monitoring 63 more potential cases.

More than 900 coronavirus cases have been confirmed in China, and CDC expects more U.S. patients to test positive in the coming days.

Reports indicate the next U.S. coronavirus patient may be identified even sooner:

Source: Twitter

Dow Recoils as CDC Confirms Coronavirus Patient

The Dow Jones and broader stock market recoiled at the news, nosediving from their session highs to post moderate losses.

As of 12:08 pm ET, the Dow had fallen more than 250 points from its daily high. The index last traded at 29,035.43 for a net loss of 124.66 points or 0.43%.

The Dow fell more than 250 points from its daily high. | Source: Yahoo Finance

The S&P 500 suffered the worst loss among Wall Street’s three primary indices, shedding 0.67% to slip to 3,303.3.

The Nasdaq split the difference, declining 0.58% to 9,347.92.

Gold Spikes; Oil & Treasury Yields Dive

Panicky investors piled into safe-haven assets, and a resurgent gold price catapulted over the $1,570 level for a daily gain of 0.43%.

The gold price rallied aggressively as investors sought harbor in safe-haven assets. | Source: Yahoo Finance

Treasury yields fell along with stock prices. The benchmark 10-year Treasury yield dove below 1.7% for the first time since October 2019 and last stood at 1.691%.

Oil prices extended their brutal decline because economists worry that the coronavirus outbreak could intensify China’s growth slowdown.

Already, containment efforts have put a severe damper on the country’s Lunar New Year festival, which accounted for just under $150 billion in consumer spending in 2019.

WTI crude futures slid 2.63% to $54.13, while Brent crude dropped 2.4% to $60.55.

This article was edited by Sam Bourgi.

Now Watch: CCN TV

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN.com, where he focuses on financial markets. He has written over 2,000 articles since joining CCN.com in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Email him directly at josiah.wilmoth(at)ccn.com.

More of: Dow Jones
Show comments