[New York Close] The 11-Year Bull Market Ended by COVID-19

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The US New York stock market has ended an 11-year bull market that lasted since the 2008 global financial crisis. The 'terminator' is expected to be recorded as the novel coronavirus infection (COVID-19).

On the 11th (local time), the Dow Jones Industrial Average fell 5.86% (1464.94 points) to close at 23,553.22, the S&P 500 index dropped 4.89% (140.85 points) to 2,741.38, and the Nasdaq index fell 4.70% (392.20 points) to 7,952.05, respectively.

On that day, the World Health Organization (WHO) declared the novel coronavirus infection (COVID-19) a 'pandemic' (global outbreak), which greatly dampened investor sentiment, and doubts about the feasibility of the US government's economic stimulus package arose, causing the US stock market to fall 20% from the high recorded in February within a month. In the stock market, a 20% drop from the previous high generally indicates the start of a correction.

On that day, the Dow index fell 20% from its closing high, and the S&P 500 index also fell 20% intraday. This essentially means that the US stock market has officially entered a bear market.

Although the Donald Trump administration has vowed to mobilize all economic stimulus cards, even considering a 0% payroll tax, doubts about its feasibility have been interpreted as a factor leading to market sluggishness.

Unlike President Trump, the Democratic Party pressured for the declaration of a state of emergency and pursued different COVID-19 measures, which further unsettled the market.

The Federal Reserve (Fed) again took steps to calm the market. On that day, the Fed expanded the limit for one-day (overnight) repurchase agreements (Repo) to $175 billion. The Fed had also raised the overnight repo limit to $150 billion on the 9th. Including interest rate cuts, this is already the Fed's third action this month.

Nevertheless, investment bank Goldman Sachs warned that the S&P 500 index could fall an additional 15% due to the COVID-19 shock as of the 10th.

Meanwhile, West Texas Intermediate (WTI) crude oil for April delivery on the New York Mercantile Exchange (NYMEX) closed down 4.0% ($1.38) at $32.98 per barrel. Gold closed down 1.1% ($18) at $1,642.30 per ounce.

This content was produced with the assistance of AI translation services.