Dow sinks more than 500 points as coronavirus fears mount
The U.S. stock market fell sharply Friday amid concerns about the toll the coronavirus outbreak could take on global economic growth.
The Dow fell 566 points, or nearly 2%, to 28,293, in afternoon trading. The S&P 500 dropped 57 points, or 1.7%, to 3,226, and the Nasdaq sank 140 points, or 1.5%, to 9,166.
The S&P 500 is on track for its second weekly loss and its biggest weekly decline since early August. The broad index had been off to a solid start for the year until concerns about the virus stunted it, though it is still on track to eke out a slight gain for January. The technology-heavy Nasdaq is also on track for its second straight weekly loss, though it is still holding on to gains of 2.3% for January.
Forecasters expect the virus to dent global economic growth, including in the U.S. Economists with Goldman Sachs estimate the epidemic will reduce U.S. growth in the three months of the year year by 0.4 percentage points to around 1.6%, down from a previous forecast of 2% for the period.
Ben May, director of global macro research at Oxford Economics, told investors in a report that “it’s increasingly apparent the disease is becoming an economic as well as a public health concern,” citing the rising number of infections and deaths. The World Health Organization has declared the outbreak a global health emergency.
In China, where the virus is thought to have started, the contagion has killed at least 212 people and infected nearly 10,000 people. That exceeds the number of cases of Severe Acute Respiratory Syndrome, or SARS, a 2003 coronavirus outbreak that led to 774 deaths.
Oxford predicts the latest coronavirus will reduce China’s gross domestic product by 0.4 percentage points this year and crimp global growth by 0.2 percentage points.
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