AMES, Iowa -- Fears of the economic effect of coronavirus has caused a massive stock market drop in the last 48 hours.
"The stock market is now pricing-in what it thinks is a reduction in likely earnings across a wide range of industries--most especially industries that have either high dependence on, or strong relationships with Chinese production" says Iowa State University economist Dave Swenson.
He says he also thinks the Chinese response to the cornoavirus outbreak will have an effect on the agriculture economy in Iowa.
"They are probably going to use this as an excuse--as a credible excuse--for not being able to move forward on some of the Phase One trade deal promises that were made" Swenson says.
The spread of the coronavirus continued to rattle Wall Street on Tuesday. For a second straight day, investors sold off stocks, leading to a massive drop in the major indexes.
The Dow Jones Industrial average fell Tuesday by 879 points just a day after dropping over a 1,000 points.