Beat Virus With 2 Sector ETFs & Stocks That Survived 2008 Crisis

 | Mar 12, 2020 01:00AM ET

Wall Street’s 11-year “bull market” came to a halt on Mar 11 after WHO declared the coronavirus outbreak as a global pandemic. The disease has affected more than Wall Street Rises on Trump's Stimulus: ETF & Stock Gainers ).

This caused a crash in global markets. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 lost about 4.9%, 5.9%, 4.7% and 6.4%, respectively, on Mar 11. About 90.5% issues (6972) on NYSE, Nasdaq and AMEX declined on Mar 11.

The Dow and the S&P 500 skidded into a bear market during the trading session on Mar 11, but only the Dow closed the day in official bear territory . The S&P 500 is now only 33 points away from the official bear status.

Previously, the S&P 500 was in the bear territory in late 2007, 2008 and early 2009 — during the peak of the Great Recession. In fact, the S&P 500 lost about 38.3% in 2008 crisis, triggered by the fall of Lehman Brothers in September.

Central banks around the world have now been acting dovish with steep rate cuts or plans for monetary easing. Many governments are considering fiscal stimulus in some forms. For instance, the Trump administration is also mulling over extending the Apr 15 tax filing deadline to help support American households and businesses, per CNN.

Do You Find the Coronavirus Crash Similar to 2008 Crisis?

Though on both occasions markets have been spiraling down, the causes are different on the whole. The 2008 crisis and the subsequent recession were driven by a sharp decline in demand. Central banks then intervened, cut rates, started QE, shored up demand and caused a V-shaped recovery.

However, things are different now with global rates already at low levels. Though central banks are enacting emergency rate cuts, such policy measures are less likely to boost markets as the latest crisis is supply shock-driven and people will probably not step outside even if they have plenty of cash.

Still, you may want to know which sectors were less hurt in the 2008 market crash. This can be a useful investing guide amid the coronavirus-induced slump.