Worst day on Wall Street since 1987 as virus fears spread; bull market ends, but isn’t Great Recession

NEW YORK (AP) — The stock market had its biggest drop since the Black Monday crash of 1987 as fears of economic fallout from the coronavirus crisis deepened.

The Dow industrials plunged more than 2,300 points, or 10%. The sell-off came despite actions from the Federal Reserve and the European Central Bank.

The steep drops over the last month have wiped out most of the big run-up on Wall Street since President Donald Trump’s inauguration.

Markets have turned turbulent amid a cascade of shutdowns across the globe and rising worries that the White House and other authorities around the world can’t or won’t help the weakening economy any time soon.

The mighty bull (market) falls victim to a tiny virus

The longest bull run in U.S. history is officially over after nearly 11 years.

The bull market officially ran from March 9, 2009, until Feb. 19, 2020, when it began the nearly 27% dive that has taken it into bear market territory as of Thursday.

Investors saw a return of 529% based on the performance of the S&P 500, including dividends.

The amazing rally for stocks altered the make-up of the market, elevating technology stocks to a dominating position and lessening the weight of industrial and energy companies.

The bull survived a number of challenges but the coronavirus outbreak injected too much uncertainty for investors.

This is not like the Great Recession

The severity of Wall Street’s rout this week may echo the swoons for stocks at the height of the 2008 financial crisis, but that’s where the parallels end.

Back then, investors were rattled as Lehman Brothers, Bear Stearns and other big financial institutions either failed or nearly did under the weight of bad mortgages as the housing market bubble burst.

The government intervened to shore up the banking system, which eventually allowed credit to flow freely again and helped set the economy on a path toward a painfully slow but lasting recovery from the Great Recession.

This time, the financial markets are not the problem, which means the government’s efforts to limit the spread of the coronavirus are more likely to have a bigger impact on the market than fiscal stimulus, analysts say.

“This is very different from 2008, it’s a biological event,” said Nela Richardson, investment strategist at Edward Jones. “The way to resolve this, the way to get past this, is efforts to contain the virus, and that’s going to be painful in the short-term.”

Copyright 2020 Associated Press. All rights reserved. Gray Media Group, Inc., contributed to this report.