LAFAYETTE, La. — The week-long free fall for the Dow Jones Industrial Average continued in trading Friday, ending the most tumultuous week the index has had in nearly 12 years.
The Dow sank by 1,000 points during trading Friday, as the market continues to fear that the COVID-19 outbreak will result in a worldwide economic slowdown.
Stocks recovered by the end of the day, but ended the day down about 350 points.
The Dow finished down more than 1,200 points on Thursday — the largest single-day drop in its history. However, as a percentage, the Dow's drop fails to rival stock market disasters like 1987's Black Monday, the 1929 crash that started the Great Depression or the 2008 financial crisis.
Economists fear that coronavirus quarantines will lead to a slowdown in trade. Oil and energy prices have sunk in the past week, in what experts say is a troubling sign of a worldwide recession. "This is really unknown territory that we're working in, we haven't had a worldwide pandemic like this since the Spanish Flu," explained UL Department of Management Head Dr. Mark Smith.
The Dow has lost 15% of its value from its record high, set on Feb. 12.
Smith said the Friday drop was bound to happen since "no one wants to be caught with risk over the weekend. Who wants to own stocks and then find out that the virus is sweeping Nigeria?"
Nigeria reported its first confirmed case of COVID-19 earlier this week.
Smith says oil prices are dropping because China hasn't been using as much. More than 30 percent of businesses in the country remain closed and once busy highways are empty.
"Right now there's a lot of surplus sitting around in supertankers off the coast of China, just waiting. When you see the pictures of all those people not going to work, they're not driving," Smith said.
He also added that no one can say with certainty if the markets will level out anytime soon, and while supply disruptions from other countries could help give American manufacturing a boost, it would take years to see the effects due to lack of infrastructure that China already has in place. For now, industry experts say all we can do is keep monitoring the situation and see how it all unfolds.