Dow plunges nearly 1,000 points as coronavirus cases surge in South Korea and Italy

[brooklynite]

Source: CNN

Hong Kong/London (CNN Business)Stock markets are falling around the world after the number of coronavirus cases surged in Italy and South Korea, putting two more major economies at risk from a virus that has already caused widespread disruption in China.

The Dow plunged as much as 997 points, or 3.4%, when US markets opened on Monday. The S&P 500 fell 3.1%, and the Nasdaq lost 3.9%. The VIX, a measure of market volatility, shot up 40%.

The losses South Korea's Kospi (KOSPI) index closed down nearly 3.9% on Monday, its worst day since October 2018, after coronavirus cases in the country surged past 800. In Italy, the main market index was down more than 4.5% after the number of cases there topped 200 — including five deaths — and authorities started shutting down public buildings, schools and sports events in parts of the country.

A growing number of companies are warning that the coronavirus will prevent them from meeting sales or profit targets for the first three months of the year. Reduced demand for goods and services, and factory closures in China, are also expected to knock the global economy and weigh on trade at a time when Japan and Germany are already teetering on the brink of recession.

Read more: https://www.cnn.com/2020/02/23/business/stock-futures-coronavirus/index.html

[Dennis Donovan]

1. Warren Buffett calls coronavirus outbreak 'scary,' but says he won't be selling stocks

https://www.reuters.com/article/us-berkshire-buffett/buffett-says-coronavirus-doesnt-dampen-his-long-term-support-for-stocks-idUSKCN20I1AB

FEBRUARY 24, 2020 / 7:12 AM / UPDATED AN HOUR AGO

Buffett calls coronavirus outbreak 'scary,' but says he won't be selling stocks

Jonathan Stempel

(Reuters) - Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc (BRKa.N), on Monday called the coronavirus outbreak “scary stuff” but said stocks remain a good long-term investment and that he won’t sell stocks despite the threat of a pandemic.

Speaking on CNBC, Buffett said investors with a 10- to 20-year time horizon and focused on companies’ earnings power will fare well in stocks.

“It is scary stuff,” Buffett said referring to the outbreak. “I don’t think it should affect what you do in stocks.”

Markets worldwide fell on Monday on concern about how the global outbreak of coronavirus, which began in China and has expanded to countries including Italy, South Korea and Iran, could hurt the global economy.

Buffett said investors cannot predict the market’s long-term performance by looking at the daily headlines.

He said Berkshire would “certainly be more inclined” to buy stocks following a selloff, at a time the U.S. economy was “strong, but a little softer” than it was six months ago.

[Farmer-Rick]

2. Well, that makes sense. You don't sell low...it's time for buying.

Of course if you are not made of money, it may just mean your stock goes away with a bad bankruptcy.

[onenote]

4. companies generally don't go bankrupt because their stocks go down with the market

Rather their stocks go down apart from what the market is doing as the company's performance puts it closer to bankruptcy.

[Farmer-Rick]

5. Tell that to Lehman Brothers and Washington Mutual.

"The Great Recession, triggered when the subprime mortgage market collapsed and pricked the housing bubble, sparked a wave of bankruptcies, including some bigger than U.S. courts had ever seen."

https://www.forbes.com/sites/steveschaefer/2011/08/10/the-great-recessions-biggest-bankruptcies-where-are-they-now/#2ea09ff04b7e

[IronLionZion]

3. Buffett is a value investor

he buys low when others are selling. And saves his money when others are buying. He also collects tons of dividend income to use for buying low.

He does this better than anyone.