The Dow Jones Industrial Average was down over 1,000 points before closing 357 points in the red, thanks to a late rally. The S&P 500 ended the day down 24 points, while the Nasdaq managed to come out ahead by 0.89 points.
Despite the last-minute gains, the markets had their worst week since the financial crisis in 2008. The markets officially entered correction territory on Thursday, falling ten percent from their previous highs. The Dow has lost 3,500 points in just five days.
The rough week was a result of the coronavirus outbreak that continues to spread across the globe. As Chinese factories were forced to close in an effort to contain the viral outbreak, prices have risen. With the supply chains shut down, many companies were forced to downgrade their forecasts for the coming year.
The Federal Reserve tried to calm investors' fears, issuing a statement saying they are monitoring the situation and will "act as appropriate to support the economy."
"The fundamentals of the U.S. economy remain strong," Federal Reserve Chairman Jerome Powell said in a rare mid-day statement. "However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."
The statement didn't help much, as many investors were concerned about the economic implications of the global viral outbreak.
"What we have right now is a very scary global health scare, that has caused complex supply chains to stall," Art Hogan, chief market strategist at National Securities, told CNBC. "As such we have a supply shock currently. Easier monetary policy could help if we were to evolve into a demand shock with the economic damage the follows the path of COVID-19. Rate cuts are not only the wrong prescription for what ails the economy right now, they are bad medicine longer term since they could raise prices without a supply response."
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