Dow tumbles more than 450 points as the coronavirus outbreak worsens
The Dow tumbled on Monday, as US stock nosedived on news of the continuing global spread of coronavirus.
It was one of the worst day in months for stocks, and the Dow was down 549 points at its lowest, closing 454 points, or 1.6% lower. That wiped out all this year’s gains for the index and was the biggest one-day percentage drop since October..
The S&P 500 fell 1.6%, which its worst performance since October. The Nasdaq Composite finished down 1.9%, its biggest one-day loss since August.
European exchanges are also lower, while Asian markets are closed for the Lunar New Year holiday.
A fifth case of the virus has been confirmed in the United States. All patients had traveled to the Chinese city of Wuhan, where the outbreak originated, prior to falling ill.
Stocks sold off last week amid fears of a global pandemic. The outbreak, which so far has infected thousands people and killed 80, concerns investors about the Chinese economy.
As the second-largest economy in the world, any drop off in China’s growth could hurt the global economy, which has already slowed over the past year.
Although the outbreak could be short-lived, it could pose a notable threat to China’s economic growth, depending on its duration and severity, noted Oxford Economics economists Tommy Wu and Priyanka Kishore in a note to clients.
“We think that consumption and travel will be the most affected, and to a lesser degree investment and industrial production. We also expect the Chinese government to roll out measures to stabilize growth, if needed,” Wu and Kishore said.
Besides stocks, pain in the global and Chinese economies could also hurt demand for commodities like oil. US oil prices settled 1.9% lower at $53.14 a barrel.
Traditional safe-haven assets rallied higher on Monday. The price for gold settled 0.4% higher at $1,576.80 per ounce, and the 10-year US Treasury bond yield slipped to 1.6%. Bond yields and prices move opposite to each other.
