The U.S. stock market fell into a correction Thursday as investors punished equities in favor of safer assets as anxiety over the spread and potential impact of the virulent coronavirus.
A correction is defined as a 10% decline in one of the major U.S. stock indexes, typically the S&P 500 or Dow Jones Industrial Average, from a recent 52-week high close.
Historical analysis shows these corrections result in a 13% decline and take about four months to recover to prior levels, on average.
But there's one big caveat. This is only if it does not fall into bear market territory, down 20% from a high. If the losses stretch to 20%, then there's more pain ahead and a longer recovery time.
Here are the numbers, according to CNBC and Goldman Sachs analysis:
The Dow and the S&P 500 each fell 4.4% on Thursday — the Dow lost a record 1,190.9 points — and each closed well in correction territory based on their recent record close. The S&P 500 and Dow are each down more than 10% since Monday and more than 12% each since their respective all-time intraday and closing highs hit earlier in February.
The S&P 500's close below 3,047.53 — its current threshold for a correction — also marked the quickest 10% decline from an all-time high in the index's history, according to Bespoke Investment Group.
— CNBC's Nate Rattner contributed reporting.
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