US close: Stocks tumble as WHO declares coronavirus a 'global pandemic'
US stocks closed sharply lower on Wednesday as investors dealt with uncertainty around a fiscal response from the White House aimed at curbing reduced economic growth.
At the close, the Dow Jones Industrial Average was down 5.86% at 23,553.22, while the S&P 500 was 4.89% softer at 2,741.38 and the Nasdaq Composite saw out the session 4.70% weaker at 7,952.05.
The Dow closed 1,464.94 points lower on Wednesday, erasing yesterday's gains as coronavirus fears continued to roil shares and leaving the 30-stock average in a bear market - down more than 20% below its record close set just last month and putting to end an expansion that started in 2009.
Losses intensified after the World Health Organisation officially declared the outbreak a global pandemic.
Wednesday's focus was also centred on comments made by Donald Trump towards the end of the previous session. The President suggested a 0% payroll tax rate that could last until the end of 2020 in order to combat any potential economic fallout from the coronavirus outbreak.
However, no dates were offered as to when such policies would be implemented and Senator Chuck Grassley, who heads up the Senate Finance Committee, said any such cut would need to be examined.
In addition to the uncertainty surrounding any potential fiscal stimulus, a reduction in travel demand and rising coronavirus cases left airline and cruise line stocks under pressure - with American, Delta, United and JetBlue all flying more than 4.3% lower, while Norwegian Cruise Line and Carnival sunk 26.7% ant 9.5% lower, respectively.
In election news, former vice president Joe Biden has secured a solid lead over Vermont Senator Bernie Sanders in the race to become the next Democratic presidential nominee. Biden recorded convincing victories in party primaries in Missouri, Mississippi, Idaho and Michigan.
Oil prices were mixed on Wednesday, with West Texas Intermediate crude up 0.76% at $33.23 per barrel and Brent crude down 3.84% at $35.79 a barrel. The yield on the benchmark 10-year US Treasury note was slightly higher at 0.863%.
Also in focus was news that the Bank of England cut its benchmark rate by 50 basis points to 0.25%, taking cues from the Federal Reserve which made the same move earlier in the month.
On the macro front, the cost of living slipped less than expected last month as a jump in food costs more than offset a large decline in energy prices.
According to the Department of Labor, the headline rate of consumer prices in the US edged up at a 0.1% month-on-month and 2.3% year-on-year clip in February. That was less than the 2.5% rise observed in January but ahead of the 2.2% anticipated by economists.
Elsewhere, the US budget deficit expanded to a new record in February, despite signs that the economy was continuing to grow at a steady pace.
The Federal budget deficit swelled to $235bn, according to the Treasury Department, the largest monthly amount ever recorded.
No major corporate earnings were released on Wednesday.