Stocks slide as investors struggle with rising number of coronavirus cases outside of China
The Dow and the broader stock market dropped Friday as investors continued to struggle with pricing in the potential fallout from the coronavirus outbreak.
Stocks opened lower but sold off sharply in the first hour of trading. The Dow fell as much as 327 points at its low, before bouncing back. The index closed down 0.8%, or 228 points.
The S&P 500 finished 1.1% lower, and the Nasdaq Composite fell 1.8%.
All three indexes ended the week with a loss.
It was the second straight day that stocks sold off after record highs earlier in the week. Investors had found comfort in a slowing of coronavirus cases in China earlier in the week, but a renewed wave of cases in other countries is putting a damper on the optimism.
There’s great concern about the spread of the novel coronavirus in countries outside China and among people with no connection to China or Wuhan, World Health Organization Director-General Tedros Adhanom Ghebreyesus said Friday during a press briefing.
In Iran, 18 new cases have cropped up and four patients have died from the disease. This comes just one day after a surprise increase in South Korea cases, where a total of 204 patients are infected.
There’s still a window of opportunity to contain the virus, Ghebreyesus said, “but the window of opportunity is narrowing.”
Safe haven investments, including US Treasuries and gold are headed higher amid the concerns. The 30-year US government bond yield dropped below 1.9% to its lowest level on record.
Gold prices meanwhile rose to a seven-year high, settling up 1.7% at $1,644.60 an ounce.
“I think you get a lot of mood swings here,” said White House economic adviser Larry Kudlow when asked about Friday’s market action in a CNBC interview.
Economists and market participants continue to struggle in assessing the economic and financial impact the coronavirus outbreak could have on the world and individual countries. The United States is considered somewhat shielded from the outbreak as it is less reliant on trade than, for example, its European counterparts.
