Stock market nears correction territory as coronavirus fears mount

Stock market nears correction territory as coronavirus fears mount

The US stock market plummeted into correction territory Thursday amid persistent fears about the coronavirus even after President Trump announced efforts to fight the outbreak.

The Dow Jones Industrial Average dropped 431.59 points to open at 26,526.00, marking a 10.2 percent drop from the 52-week high reached earlier this month. A market correction is defined as at least a 10 percent decrease from the recent peak.

The Nasdaq composite also dropped below that threshold — it fell 236.74 points at the open to start at 8,744.03 after US health officials said the number of confirmed virus cases here had risen to 60 — including one in California that may have been contracted domestically.

The S&P 500 also continued its recent tumble but did not quite enter a correction when the market opened, falling 1.7 percent to start at 3,062.54.

Trump tapped Vice President Mike Pence on Wednesday to spearhead American efforts to contain the virus, which he said poses a “very low” risk to Americans. But the US Centers for Disease Control and Prevention said it expected the disease to spread within the US.

Investors appeared to continue their rush into safe havens Thursday, with the price of gold jumping 0.6 percent to $1,649 an ounce. The yield on the benchmark 10-year US Treasury bond, which drops when prices rise, fell to 1.267 percent, beating the intraday low set earlier this week.

“Safe-haven currencies are doing very well and gold is heading back higher, and unless we see a slowdown in the coronavirus cases outside China, risk sentiment will continue to be undermined,” Peter Kinsella, global head of FX strategy at London-based UBP, told Reuters.

The stock selloff also continued in Europe and Asia as foreign leaders sounded alarm bells about the disease known as COVID-19 spreading further outside China, where the epidemic originated.

Losses as large as 2.5 percent slammed the CAC 40 index in France, where President Emmanuel Macron said Thursday that an epidemic was “on its way.” London’s FTSE 100 index tumbled as much as 2.7 percent while Germany’s DAX fell 2.6 percent after the country’s health minister warned of the start of an epidemic there Wednesday.

Japan’s Nikkei 225 index and the Kospi in South Korea fell 2.1 percent and 1 percent, respectively, amid growing fears about the spread of the coronavirus in those countries. But Chinese markets showed signs of recovery, with the Shanghai Composite climbing 0.1 percent and Hong Kong’s market rising 0.3 percent.

The spread of the virus has raised concerns about the epidemic harming global growth. Former Federal Reserve chair Janet Yellen reportedly warned Wednesday that the outbreak could drive the US into a recession.

“If it doesn’t hit in a substantial way in the United States, that’s less likely,” Yellen said at an event in Michigan, according to Bloomberg News.

With Post wires

Source : Noah Manskar Link

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