US Stocks Fall Sharply Again 02/28 09:25
U.S. stocks fell sharply in early trading Friday and were on track for their
worst week since October 2008 as the spreading coronavirus threatens to derail
the global economy.
NEW YORK (AP) -- U.S. stocks fell sharply in early trading Friday and were
on track for their worst week since October 2008 as the spreading coronavirus
threatens to derail the global economy.
The virus outbreak has been shutting down industrial centers, emptying shops
and severely crimping travel all over the world. More companies are warning
investors that their finances will take a hit because of disruptions to supply
chains and sales. Governments are taking increasingly drastic measures as they
scramble to contain the virus.
The Dow Jones Industrial Average fell 974 points, or 3.8%, to 24,791 as of
10:11 a.m. The S&P 500 lost 3.7% and the Nasdaq fell 3.2%. China's benchmark
index fell 3.7% and Germany's DAX fell 4.1%.
The benchmark S&P 500 index has now lost 15% since hitting a record high
just 10 days ago. Crude oil prices fell again. The rout has knocked every major
index into what market watchers call a "correction," or a fall of 10% from a
peak. The last time that occurred was in late 2018, and market watchers have
said for months that stocks were heavily overpriced and long overdue for
Bond prices soared again as investors sought safety and became more
pessimistic about the economy's prospects. That pushed yields to more record
lows. The yield on the 10-year Treasury note fell sharply, to 1.17% from 1.30%
late Thursday. That yield is a benchmark for home mortgages and many other
kinds of loans.
Crude oil prices slumped 4.2% over worries that global travel and shipping
will be severely crimped and hurt demand for energy.
The weeklong market sell-off follows months of uncertainty about the spread
of the virus, which hit China in December and shut down large swaths of that
nation by January. China is still the hardest hit country and has most of the
83,000 cases worldwide and related deaths.
Uncertainty turned into fear as the virus started jumping to places outside
of the epicenter and dashed hopes for containment.
Airlines and cruise operators have suffered some of the worst hits as flight
routes are cancelled, along with travel plans. Big names like Apple and
Budweiser brewer AB InBev are part of a growing list of companies expecting
financial pain from the virus. Dell and athletic-wear company Columbia
Sportswear are the latest companies expecting an impact to their bottom lines.
Many companies face the prospect of crimped financial results with their
stocks already trading at high levels relative to their earnings. Before the
virus worries exploded, investors had been pushing stocks higher on
expectations that strong profit growth was set to resume for companies after
declining for most of 2019. If profit growth doesn't ramp up this year, that
makes a highly priced stock market even more vulnerable.
Nearly 60 nations representing every continent, except Antarctica, have
confirmed cases. The virus outbreak has prompted a wide range of reactions from
nations hoping to contain its spread and economic impact.
The Geneva auto show was cancelled as Swiss authorities banned large events
of more than 1,000 people. Parts of Italy's northern industrial and financial
center remain under quarantine. Japan is preparing to close schools nationwide.
The U.S. is preparing for the virus after a case unrelated to travel was
confirmed in California.