Market reactions to past virus scares show stocks may have more to lose

  • Looking back 20 years, previous epidemics from SARS in 2003 to the Ebola scare six years ago shaved 6% to 13% off the S&P 500 over different lengths of time, according to Citi.
  • The equity benchmark was down about 2.6% through Monday’s close since Jan. 21.
  • Zika started in Nov. 2015 and was spread mostly by bites from infected mosquitoes. The market suffered a near 13% pullback in the span of 66 sessions.
  • All 11 S&P 500 sectors declined during SARS, and information technology and communication services were among the biggest losers, falling 14% and 26% respectively.

Investor anxiety over the coronavirus led to the Dow Jones Industrial Average’s longest losing streak since August, and the market may have more to lose, going by past epidemics.

Looking back 20 years, previous epidemics from SARS in 2003 to the Ebola scare six years ago shaved 6% to 13% off the S&P 500 over different lengths of time, according to Citi’s head of U.S. equity strategy Tobias Levkovich. The equity benchmark was down about 2.6% through Monday’s close since Jan. 21.

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