The Dow finished more than 1,000 points lower Monday, marking its third-worst daily point drop in history, as the spread of the COVID-19 illness beyond China raised worries that the hit to overseas economic growth could be more persistent than investors expected, hampering the prospects for a global recovery in 2020.

The Dow Jones Industrial Average DJIA, -0.87% shed 1,031.60 points, or 3.6%, to settle at 27,960.80, after plunging more than 1,079.97 points to a session low of 27,912.44. Monday’s decline turned the blue-chip gauge negative for 2020, leaving it with a 2% year-to-date decline. The S&P 500 SPX, -1.11% slumped 111.86 points, or 3.4%, to close at 3,225.89, and the Nasdaq Composite COMP, -1.07% off by 355.31 points, or 3.7%, to finish at 9,221.28. The S&P 500 is now down 0.2% year-to-date, while the Nasdaq is still up 2.8% in 2020

Read:Gold, Treasury prices soar as coronavirus fears spark global stock-market selloff and flight to safety

What drove the market?

“We are being derailed for one specific reason,” said Tony Roth, chief investment officer of Wilmington Trust, pointing to the use of quarantine and isolation to contain the spread of COVID-19 infections. “That’s going to have economic fallout,” he told MarketWatch, while predicting U.S. stocks could potentially “see a 10% to 20% correction in the next four weeks.”

See: The Dow is off by more than 1,000 points and heading for its second-worst point drop ever — here’s how the stock market tends to perform after big drops

Authorities in northern Italy canceled some public events, including Venice’s Carnival, in an effort to reduce the spread of the coronavirus. Italian officials said Sunday they have 152 confirmed cases, the most in any country outside Asia. Neighboring Austria temporarily halted all rail traffic to and from Italy for several hours Sunday, following a scare about two possibly infected passengers on board. The FTSE MIB Italy index I945, -1.08% slumped over 5% Monday.

“Markets were betting that the coronavirus was going to be contained in China, and that we would see some V-shaped recovery. But as headlines on the virus spread have come out, there’s uncertainty how far this will go,” said Keith Lerner, chief market strategist for SunTrust Advisory Services, in an interview.

Asian equity markets also sold off after the number of cases in South Korea shot up over the weekend. South Korea reported 70 more cases and a lawmaker in Iran said the death toll from the city of Qom is 50.

On Saturday, the International Monetary Fund warned the virus outbreak could reduce global economic growth by 0.1% this year, and drag China’s annual growth 0.4 percentage points lower than January estimates.

The World Health Organization also declined to call the coronavirus a pandemic. Instead, the international health body said they saw it as epidemics in different parts of the world.

See: Why the coronavirus outbreak is delivering a fresh dose of recession fear to the stock market

China’s President Xi Jinping on Sunday noted the outbreak news was “grim,” but said measures must be taken to get China’s economy going again, including reopening factories in low-risk areas. Experts forecast as much as a 1% reduction in China’s economic output this quarter due to strict quarantines that closed businesses and factories.

Chinese officials again reported fewer than 1,000 new cases Sunday, though the overall total in mainland China is nearly 77,000 infected, with more than 2,400 deaths.

“What we’re hearing from China is positive,” Kristina Hooper, chief global market strategist at Invesco told MarketWatch. “Clearly, this is a significant issue, but we know there is a light at the end of the tunnel. We just don’t know how long the tunnel is.”

In the U.S., there are now 53 confirmed cases of COVID-19, as more passengers who returned from the Diamond Princess cruise ship tested positive for the virus, according to an update from the Centers for Disease Control and Prevention.

Coronavirus update: 79,339 cases, 2,169 deaths, clusters emerge in Iran and Italy

What companies were moving?

What was on the calendar?

The economic calendar was light Monday. The January reading of the Chicago Federal Reserve Bank’s national activity index rose to -0.25, from -0.51 in the previous month.

How did other markets trade?

European stock benchmarks had their worst session in about four years. The Stoxx Europe 600 SXXP, -0.66% shed 3.8% to settle at 411.86, its biggest one-day percentage drop since June 27, 2016, according to Dow Jones Market Data.

South Korea’s Kospi 180721, +0.25% sank 3.9% in Monday trading as the country went on high alert to contain the spread of COVID-19.

Australia’s S&P/ASX 200 XJO, -0.31% closed down 2.3%, and stocks fell 1.6% in Hong Kong HSI, +0.47% , though the Shanghai Composite SHCOMP, +2.06% lost just 0.2%. Japanese equity markets were closed Monday for a holiday.

Crude-oil prices fell 5%, with West Texas Intermediate crude for April delivery US:CLJ20 settling 4.9% lower at $50.87 a barrel, while April Brent crude UK:BRNJ20, the global benchmark, lost 5.5% to finish at $55.27 a barrel.