Stocks fall, capping Wall Street’s worst quarter since 2008

Stocks fell Tuesday to close out Wall Street’s worst quarter since the most harrowing days of the 2008 financial crisis.

The S&P 500 dropped a final 1.6%, bringing its loss for the first three months of the year to 20% as predictions for the looming recession caused by the coronavirus outbreak got even more dire. Stocks haven’t had this bad a quarter since the last time economists were talking about the worst downturn since the Great Depression, when the S&P 500 lost 22.6% at the end of 2008.

The rise in the number of coronavirus cases around the world has sent markets to breathtaking drops since mid-February, undercutting what had been a good start to the year. Markets rose early in the quarter, and the S&P 500 set a record with expectations that the economy was accelerating because of calming trade wars and low interest rates around the world.

But the virus outbreak abruptly put the clamps on the economy. Benchmark U.S. crude oil dropped by roughly two thirds this quarter amid expectations for weaker demand. The yield on the 10-year Treasury dropped below 1% for the first time as investors scrambled for safety, and it ended the quarter at roughly 0.67%.

Germany’s DAX lost a quarter of its value, South Korean stocks fell just over 20% and the Dow Jones industrial average of 30 U.S. blue-chip stocks dropped 23.2% for its worst quarter since 1987.

The big question is if markets will get worse. At this point, no one knows.

“People are trying to digest the length and magnitude of what the coronavirus impact is going to be,” said George Rusnak, managing director of investment strategy at Wells Fargo Private Bank.

The steep drops from Tokyo to Toronto in recent weeks reflect investors’ understanding that the economy and corporate profits are in for...