They were down slightly, marking the public's general consensus that while the news was worrying, that there was still a good possibility of containment. If you feel like you have a better understanding of risk than the markets do, it's pretty dang cost effective to buy puts, and you can make a LOT of money with very well understood downsides.
In November 2002, when SARS was first identified S&P was at ~909, it dropped to 846 in March 2003, and was back up as the virus was shown to be under control. Obviously lots of factors in play, but we're very susceptible to hindsight bias as a species.
The human lifespan is too short to distinguish between luck and skill for most low frequency traders. You'd have to see dozens of potential pandemics as severe as this one to know if you were "right". But it's empirically true that the average active trader underperforms the market. I build short-term trading strategies at my day job, but at home I just buy and hold some boring vanilla index funds. One nice thing about higher-frequency trading is that you have enough statistical power to quickly see lots of "obvious" ideas fail miserably. It teaches humility.
Where were efficient markets when all news from China pointed to a pandemic?