Dow Plunges to Biggest Loss in History on Coronavirus Fears

The Dow Jones Industrial Average closed Thursday down nearly 1,200 points – its largest single-day drop in history – as U.S. stocks were driven into correction territory by escalating concern over the ongoing coronavirus outbreak.

The Dow shed nearly 4.5%, closing at its lowest level since August and weathering a sixth consecutive day of losses. The Standard & Poor's 500, similarly, dropped more than 4.4% on Thursday. Both the Dow and S&P 500 are down 11% from where they ended last week.

Losses have been widely attributed to the spread of the virus. Reports surfaced on Wednesday night that the first "community transmission" of the disease had been detected in California, meaning a case was confirmed in a person who had not traveled to an area battling infection and had not known they'd been in contact with someone who had.

"The world just has to wake up to the fact that we're in the middle of a coronavirus pandemic," Michael Osterholm, director of the University of Minnesota's Center for Infectious Disease Research and Policy, told CNBC's "Squawk Box" during an interview on Thursday.

U.S. stock indexes had for weeks proven resilient to the disease's spread, despite international corporations sounding the alarm over supply chain disruptions in China, where the virus is believed to have originated. To date, more than 82,000 infections have been confirmed, and at least 2,800 people have died as a result.

"Despite a 12 percent decline since the S&P 500 peaked on February 19, what we've seen is a correction, not a crash," Greg McBride, a senior vice president and chief financial analyst at Bankrate.com, said in a statement shortly after markets closed on Thursday. "Markets move sharply when fear and uncertainty are prevalent, and there is plenty of both right now."

The U.S. has identified 60 cases of the virus – the majority of which were associated with passengers aboard a cruise ship that was temporarily quarantined off the coast of Japan. But Osterholm notes the rollout of functional testing supplies has been slow, suggesting U.S. infection rates may be higher than official statistics have accounted for.

"The absence of evidence is not the evidence of absence. I think we have a much more robust transmission going on in this country right now that we just haven't picked up," Osterholm said.

The disastrous day on Wall Street comes less than 24 hours after President Donald Trump attempted to allay Americans' and investors' concerns by appointing Vice President Mike Pence as the country's official coronavirus czar. On Thursday, Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow and Surgeon General Dr. Jerome Adams were named to Pence's task force.

"While comforting to know Washington officials are readying a response, the CDC has confirmed that a California man contracted the disease despite reportedly having no known travel links or exposure to another patient and has furthermore warned to brace for a further spread in the U.S.," Lindsey Piegza, chief economist at Stifel Economics, wrote in a research note on Thursday.

The World Health Organization also confirmed on Thursday that infections had been identified in Brazil, Georgia, Greece, North Macedonia, Norway, Pakistan and Romania. On Wednesday, the number of new confirmed infections outside of China eclipsed the number of cases confirmed internally for the first time.