STEVE INSKEEP, HOST:
A basic lesson of watching the stock market is that it fluctuates, so it's best not to read too much into a single bad day or even several.
DAVID GREENE, HOST:
Even so, it is hard to miss the message of this past week.
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GREENE: After last night's closing bell, the Nasdaq was down more than 4% in a single day. The Dow Jones Industrial Average has lost more than 3,500 points since the middle of last week. And all of this has been happening as the coronavirus has been spreading. The Trump administration, meanwhile, has been struggling to find a convincing response.
INSKEEP: NPR chief economics correspondent Scott Horsley has been following this story and begins our coverage of the coronavirus. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: How significant are these losses? We just heard all these numbers, but what do they truly mean?
HORSLEY: Yeah, it's been a rough week. I mean, the Dow lost more than a thousand points on Monday, nearly 900 points Tuesday, took a little breather on Wednesday - down only a little over 100 points and then the freefall yesterday, with the Dow plunging almost 1,200 points. All told, the blue chips have lost nearly 13% from their peak earlier this month. And the broader S&P 500 and Nasdaq indices are also down more than 12%.
What's more, Steve, the selling really accelerated at the end of the day yesterday. And the future's markets are pointed to continued losses this morning. Overnight, we saw stock losses in the Asian and European markets as well.
INSKEEP: OK. So if the market has dropped more than 10% in a short period of time, they call that a correction. Is that just a way for us to talk about the market? Or is there some real significance to that milestone?
HORSLEY: As a yardstick, it's pretty arbitrary. There's not a huge difference between a market that's gone down 9.9% and 10.1% - or in this case, nearly 13%. But the speed of this drop is kind of stomach-churning, you know? It was just last week that the S&P and Nasdaq were setting record highs. The Dow reached its recent high on February 12. So this has been a very rapid turnaround in sentiment. And it really signals the very swift reassessment by investors, or maybe we should say the wakeup call for investors, about the coronavirus epidemic and the potential damage it could do to the world economy.
INSKEEP: What makes it an economic threat?
HORSLEY: You know, what investors have been struck by this week is the surge of cases outside of China and the signal that that could have for not just the production and demand in that country, but the broader economy. We saw the first cases this week in Africa, the first cases in Latin America, growing numbers of cases in Italy and elsewhere in Europe. Of course, the first case here in the U.S., it's not easily traceable to some foreign travel.
All of that suggests that the problem is going to be more widespread and longer lasting than had been anticipated. Up until now, investors sort of thought this would be a hit to the economy in the first three months of the year and then a quick recovery. Now, chief economist Joe Brusuelas of RSM says it looks like the damage is going to continue at least into the summer.
JOE BRUSUELAS: Effectively, at this point, I think the first half of the year, economically, we're being close to it being lost at this point.
HORSLEY: Goldman Sachs put out a revised forecast this week that is now anticipating zero profit growth for U.S. corporations for the full year.
INSKEEP: What, if anything, can the government do about this?
HORSLEY: Well, there's a lot of pressure on the Federal Reserve to lower interest rates. Richard Clarida, the vice chairman of the Fed, was speaking here in Washington earlier this week. He said the central bank is monitoring the situation closely but that it's too soon to know exactly what should be done here. Certainly, the markets are now anticipating action by the central bank. And there's going to be mounting pressure for the Fed to act.
INSKEEP: Scott, thanks so much.
HORSLEY: You're welcome.
INSKEEP: That's NPR's Scott Horsley.
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INSKEEP: Now, Scott mentioned this, the first case of community transmission of the coronavirus inside the United States.
GREENE: That's right. So the Centers for Disease Control says the patient who has the virus was left undiagnosed for days. UC Davis Medical Center says staff requested a test for the coronavirus. But the CDC initially ruled out a test because the patient's case did not match its criteria.
INSKEEP: NPR's Allison Aubrey is with us with more on this. Good morning.
ALLISON AUBREY, BYLINE: Good morning.
INSKEEP: Why wouldn't they just test the guy?
AUBREY: Well, the capacity for testing...
INSKEEP: Or person...
INSKEEP: ...We should say person, but go on. Yeah.
AUBREY: Capacity for testing is limited. I mean, there have been some hiccups with testing and diagnosis. And I think at this moment, Steve, a lot of people who are sick are probably wondering to themselves, could it be, you know? Could it be coronavirus? But it's not as if you're going to be able to walk into your doctor's office or your local hospital and say, hey, I've got a fever or a cough. Give me a coronavirus test. It's not going to happen. I spoke to Seth Cohen. He's an infectious disease physician at the University of Washington.
SETH COHEN: As of right now, we are not implementing widespread testing. Part of the reason for this is tests are limited. And we want to test people who are really at higher risk.
AUBREY: So this would be people who are close contacts of those known to be infected. And he says, still, at this moment, it's more likely that most people with these symptoms have flu or cold.
INSKEEP: Yeah. And I guess we should clarify. Coronavirus is more deadly than the flu, but the flu is way, way, way more prevalent. You're way more likely to have that.
AUBREY: Absolutely. Thousands - millions of cases in the U.S. Yeah.
INSKEEP: So how should people prepare for the possibility that the coronavirus might spread more widely than it has?
AUBREY: Sure. Well, you don't have to panic, but it is time to prepare. Think about it the way you think about a big snowstorm or a hurricane. If it never hits, great, but if it does, you'll be glad you prepared. So think about what you'd need in your home if you couldn't go to the grocery store for a week. You know, don't hoard, but stock up your cupboards with some extra food. If you're headed out to the grocery this weekend, buy a few extra items, shelf-stable stuff such as beans and rice. Also look in your medicine cabinet to see that you have basic things like aspirin or ibuprofen. Refill your prescription medications if you can.
INSKEEP: Are masks really of any use?
AUBREY: You know, health care providers need masks. But for the rest of us, there's not a lot of evidence that wearing one helps prevent healthy people from getting infected. But if you suddenly become the caregiver at home for someone who is infected and sick, well, then the CDC recommends using them. But they have to be well-fitted and used properly.
INSKEEP: I suppose it's possible that adults may become caregivers at home during the day for kids who are not sick...
AUBREY: That's right.
INSKEEP: ...But they can't go anywhere anymore.
AUBREY: That's right. I mean, the big thing to think about - if there is an outbreak in your community, schools may close. So ask your employer about work-from-home options. If you're a restaurant worker, that's not going to be an option. If you're a low-income worker, backup care might not be affordable. So these won't be easy recommendations to follow, but they are things that could pay off if an outbreak does happen.
INSKEEP: Allison, I feel reassured just having some information - really appreciate it.
INSKEEP: That's NPR's Allison Aubrey this morning.
AUBREY: All right. Thanks so much.
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INSKEEP: OK. Here we go. South Carolina's Democratic presidential primary takes place tomorrow.
GREENE: This is a crucial moment for several candidates. Joe Biden has staked his candidacy on his ability to win South Carolina. Tom Steyer has bought $17 million worth of local broadcast ads, hoping to win significant support, which he has failed to do elsewhere.
INSKEEP: Victoria Hansen has been covering this primary. She's a reporter with South Carolina Public Radio. And we found her a little ways outside Charleston. Good morning.
VICTORIA HANSEN, BYLINE: Hey. Good morning.
INSKEEP: What's it like to be in South Carolina this week?
HANSEN: You know, it's exciting. It's a bit crazy, too, with so many of the candidates in town here in Charleston and all across the state. And I think a lot of that has to do with the fact that this is a more diverse community, with more African Americans making up - well, they make up roughly 60% of the Democratic voters here. So, you know, it's the first major test for African American support. There's also more women voters here. And I just think back to the night, Tuesday night, walking up to the debate downtown at the Gaillard Center. I walked alongside an African American woman. She was carrying a Joe Biden sign. And we kind of talked as we walked. And she was so pumped up about attending this debate. And she called Joe Biden her hero. So I couldn't help but wonder, you know, during the boos for Sanders during this debate how much that could be because this was more of a Charleston audience. You know, I know we're known for being polite, and we are. But, you know, Joe Biden, this is kind of a second home for him. There were a lot of Joe Biden supporters there that night.
INSKEEP: And the enthusiasm that was lacking for him elsewhere seems to be present where you are.
HANSEN: Yeah, he does. And not only that, you know, he has a lot of friendships with leaders in the community here. I can remember him being at the funeral for Senator Fritz Hollings. Of course, he was here for Mother Emanuel tragedy. He has longtime friendships with our former mayor of 40 years, Mayor Joe Riley. So, yeah, he's very, very well known here. In fact, when Congressman Jim Clyburn endorsed him, he said, the bottom line is we know Joe.
INSKEEP: All right. Well, explain the rules here, though. You mentioned that the Democratic electorate can be as much as 60% black. We'll see what exactly it is based on the exit polls. But it's an open primary, which, if I'm not mistaken, means that Republicans could cross over to the Democratic primary and try to vote for the person they think that's most likely to lose in the fall. Is that correct?
HANSEN: Yeah, that is correct. And in fact, we're getting lots of reports that that will happen and reports that there is this kind of a push from the Republican Party to get Republican voters out this Saturday to vote for the person they think is least likely to win. And I'm hearing that is Bernie Sanders, at least from the folks I've spoken to. I will be at the Trump rally later today. And so I'm curious to talk to folks there and see if they will tell me, you know, if that's their intention.
A lot of people have told me that is. But they haven't been really willing to go, you know, on the record and say it and give me an interview that I can bring to you. But, yeah, absolutely. That is something that, also, our state legislature is taking a look at right now saying, you know what? We might want to change that. So they're looking at the possibility of making a change in the future.
INSKEEP: I'm glad you mentioned the Trump rally. The president has been going to some of these places where there's a contested Democratic primary and showing up the night before. That's happening again. What is it like to be in this state where, as you said, there's a very large black population, there's a very active Democratic Party, but it's also, on the whole, a very conservative state, very Republican state?
HANSEN: Yeah. And that makes it, I think, very, very intense because, yes, on one side, you have African American voters who are very, very excited to have their voices heard, people who support Joe Biden very excited to have their voices heard. But you also have a very strong Republican base here. And that's what we're going to feel tonight when we go out to this rally. You're going to feel that strong support. And of course, he's in town with Lindsey Graham, who's up for reelection as well.
INSKEEP: OK. Victoria Hansen, thanks so much for your reporting - really appreciate it.
HANSEN: Yeah, you've got it. Thanks so much.
INSKEEP: She is with South Carolina Public Radio, speaking with us on this day before the South Carolina presidential primary. Transcript provided by NPR, Copyright NPR.