Stocks started Wednesday off on all the wrong notes, a situation that only got worse after the World Health Organization (WHO) officially called the coronavirus outbreak a global pandemic, news that gave sellers good reason to punish equities and riskier assets.
- The S&P 500 dipped 4.89%
- The Dow Jones Industrial Average sank 5,86%
- The Nasdaq Composite swooned 4.70%
- Extending a tailspin of epic proportions, Boeing (NYSE:BA) was far and away the Dow’s worst-performing stock today, plunging 16.79%.
In late trading, the Dow was residing about 20% below its February record, fitting the technical definition of a bear market.
To be sure, coronavirus uncertainty is crippling financial markets and perhaps exacerbating today’s declines was a surprising level of silence on the issue from the White House.
In fact, things have gotten so bad that, for the second time in a month, Goldman Sachs is paring its year-end S&P 500 estimate, essentially calling for the end of a bull market that was already on thin ice.
These ominous headlines were greeted with a predictable result: in late trading none of the Dow’s 30 stocks were higher. UnitedHealth Group (NYSE:UNH) was the only member of the blue-chip index not lower by at least 3%.
Boeing: Bad to Worse
Regular readers of this space know that Boeing frequently makes appearances and rarely with good news. That theme continued today as the aerospace giant was slammed after the company said it’s going to draw down the entirety of a $13.8 billion credit revolver. That news comes after Boeing said it had already taken $7.5 billion from that instrument.
The original loan was $13 billion from Citigroup, but some other lenders tacked on $800 million and it could be boosted as high as $14.5 billion if other banks join in on the “fun.”
Unfortunately, Boeing has morphed from a 737 Max story to coronavirus story because of declining demand and weakness among airlines. If orders for the 787 Dreamliner fall precipitously, which could happen in a recession, Boeing stock could be in for even more severe punishment.
Boeing’s Wednesday woes again weighed on United Technologies (NYSE:UTX), which was also among the worst Dow offenders today.
Recently, Apple (NASDAQ:AAPL) has looked somewhat less worse for the wear than the broader market, but that doesn’t mean the iPhone maker has been immune from COVID-19-induced strife. As expected, the virus is going to have some impact on Apple and at least one analyst is confirming as much.
In a note out earlier today, BofA Global Research analyst Wamsi Mohan trimmed 2020 delivery estimates on iPhones, iPads, Macs, Apple Watch and accessories.
The analyst lowered his Apple earnings estimate to $12.57 a share, from $13.29 while cutting his price target on the stock to $320 from $350, but he did reiterate a “buy” rating.
In this case, I’m referring to Dow Chemical (NYSE:DOW), a name that has been one of the worst-performing members in the Dow Jones Industrial Average for some time. Down almost 54% from its 52-week, Dow notched a double-digit loss today after the company said it expects sales to fall by $400 million in the current quarter due to the coronavirus.
Bottom Line on the Dow Jones Today
Good news is currently in short supply, but for those looking for some green shoots, it’s worth noting that amid all the downward revisions to S&P 500 estimates that are currently taking place, many of the banks behind those forecasts are speculating that a new bull market will be born later this year.
That’s some time to wait and even those projections are imperiled by lack of clarity on when the COVID-19 situation will be resolved in the U.S. Until that happens, there’s a significant headwind in front of the economy and riskier assets.
Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.