S&P 500 suffers its quickest correction

The S&P 500 slipped into a correction after its 4.4% drop on Thursday, the dourest warning yet of the coronavirus' drag on US stocks.

The six consecutive days of drops mark the benchmark index's quickest correction since 1933, when the S&P 500 plummeted 13.3% in two days, according to The Financial Times.

A correction is defined as a 10% drop from a record high.

The index's massive drop arrived as new virus deaths outside of China ratcheted up concerns that the outbreak would escalate to an economically crippling pandemic.

The S&P 500 slipped through the week to post its fastest correction since the Great Depression as fears of a coronavirus-driven recession tore into markets around the world.

The key index notched its biggest single-day drop since 2011 on Thursday after plunging 4.4%. The S&P 500 index wiped out its year-to-date gains after its Monday and Tuesday slumps and now sits 10.7% below where it closed December 31.

The index's rapid downturn has also pushed the S&P 500 to 14.5% below its February 19 high as of Friday morning. A market correction is officially defined as a 10% drop from an index's peak, leading the S&P 500 to easily surpass the bleak threshold. The six days of consecutive declines established the correction as the index's fastest since July 1933, when the S&P 500 plummeted 13.3% in two days, The Financial Times reported.

US stocks stood at record highs just last week as investors shrugged off initial reports of the coronavirus' escalation. Yet a spike in deaths outside China on Monday prompted new fears of the outbreak damaging the global economy. The S&P 500 tumbled throughout the week as the number of virus cases rocketed higher.

The index's steep declines pushed investors out of equities and into traditionally defensive assets. Treasury yields hit several record-lows, while gold gained early in the week before a modest slump. Those betting on prolonged chaos in US equities also profited, as Cboe's VIX index — the US market's preferred volatility gauge — spiked to its highest level since 2015.

Despite the broad market downtrend through the end of the month, a small group of stocks is surging on hopes they can combat the outbreak. Moderna, Gilead, Novavax, and others spiked through the week as investors bet on the small biotech firms to offer the first preventative vaccines and treatments for coronavirus.

The coronavirus has killed 2,853 people and infected more than 83,000 as of Friday morning. The virus is primarily concentrated in China, but new outbreaks in Iran, Italy, and South Korea have led several economists to estimate the hit to global GDP should the virus morph into a pandemic.

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