Dow and S&P 500 Plunged more than 10%

Week of 2020-02-24, is to be remembered as it marked the beginning of the market plunged – in only one week, the Dow and S&P 500 each dropped 12% and 11% respectively.

Since World War II, the S&P 500 has had 26 market corrections (excluding the one that started this week). During those corrective periods, the S&P 500 has declined by an average of 13.7% and has taken about four months to recover. That’s of course if they don’t turn into bear markets, as shown:

Then the fear of the coronavirus outbreak had pushed the yield on the 10-year treasury bond to historic lows – 1.16% on 2020-02-28, more than 30 basis points below where it closed in July 2016, at 1.37%:

Reference:

1. CNBC, Fred Imbert, 2020-02-28, “The Dow lost 12% in one week.  Here’s why and what likely happens next”
2. CNBC, Jesse Pound, 2020-02-28, “Plunging rates in the US are rewriting the history books”