Wall Street rebounded Monday morning after weathering its worst week in a decade amid rising fears that the coronavirus will ding the global economy and stunt growth.
The Dow Jones Industrial Average opened the first week of March with a gain of around 220 points, a stark contrast to the 3,500-point loss it suffered last week.
The blue-chip’s performance followed an overnight swing of more than 1,000 points, after the Organization for Economic Cooperation and Development warned that global economic growth could be cut in half if the viral epidemic continues its current trajectory.
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Last week was the worst performance for all three major averages since the financial crisis, with the S&P 500, the Nasdaq, and the Dow all entering correction. Markets were down for seven straight days.
That sell-off was fueled by rising uncertainty about the coronavirus epidemic, and came amid multinational companies abandoning or downgrading their forecasts for 2020 due to near-paralysis in their supply chains, production lines and cargo shipping.
The Dow closed with the week with a decline on Friday of 357 points, having fallen earlier in the day by 1,000 points for the third time in a week. Thursday’s historic decline of 1,190 was the biggest drop in history for the blue-chip index.
The stock market has ratcheted up a 38 percent gain since President Donald Trump came into office, though that stood at 61 percent prior to last week’s meltdown.
The plunge “shows the extent to which an outbreak can hit an economy,” said Ed Hyman, a widely followed economist on Wall Street, cited on CNBC. “All this is quite uncertain, and we may be overreacting. But we also don’t want to underreact.”