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Yesterday did not go well for international stock markets. After drops in other exchanges around the world, the U.S. stock market set a record and not a good one.
The Dow Jones Industrial Average is an index of 30 significant stocks. It includes companies like Disney and McDonalds and it's one major indicator of how the market as a whole is doing. The Dow dropped so far so fast yesterday that a circuit breaker kicked in, a temporary stop to trading to give investors a chance to catch their breaths. It lasted 15 minutes. And when everything was said and done with at the end of the day, the Dow had lost more than 2,000 points, its worst point drop than on any other day in history.
What's more important to investors than the points though are percentages. The Dow lost 7.8 percent of its value. That's not its biggest percentage drop ever but it was its worst day since October of 2008 when the "Great Recession" was dragging down the world economy. Why did this happen? Two main reasons.
One of them was oil prices. They collapsed on Monday after a disagreement over oil production between Saudi Arabia and Russia. They are two major producers of oil. And though lower oil prices can translate to lower gas prices, which many drivers see as a good thing, investors don't like falling oil prices because they often correspond with a weakening global economy. So this was a big reason why there was a sell off in the U.S. stock market yesterday and that triggered the circuit breaker.
But there was another reason for the market dive yesterday. And if you've been watching you know what I'm about to say, coronavirus. According to information put together by Johns Hopkins University, more than 113,000 cases have been confirmed around the world. Almost 4,000 people who've caught the virus have died. That's about three and a half percent of total cases. And more than 62,000 people almost half the total cases have recovered from the virus.
But the fear of this disease spreading has led to school closures for hundreds of millions of students around the world. The nation of Italy, which has seen the largest outbreak in Europe, is under lockdown with schools, movie theaters, and night clubs closed. Ireland has called off its St. Patrick's Day parades. Theme parks and museums have been closed. Sports events and some religious gatherings have been called off.
