U.S. Stocks Continue Nosedive As Coronavirus Spreads To New Countries

Stocks have continued to fall off a cliff in morning trading on Friday, extending the sell-off seen over the past several sessions. The Dow has shown a particularly steep drop, tumbling to its lowest intraday level in nearly nine months.

Currently, the major averages are stuck firmly in negative territory but off their worst levels. The Dow is down 957.51 points or 3.7 percent at 24,809.13, the Nasdaq is down 228.49 points or 2.7 percent at 8,337.99 and the S&P 500 is down 101.11 points or 3.4 percent at 2,877.65.

Escalating concerns about the coronavirus outbreak continue to weigh on the markets as the disease continues to spread across the globe.

New Zealand and Nigeria are among the countries that have recently confirmed their first coronavirus cases, with the World Health Organization warning that the fast-spreading disease could soon reach most, “if not all” countries around the world.

WHO director-general Tedros Adhanom Ghebreyesus recently said the organization has raised its assessment of the risk of spread and the risk of impact of the coronavirus to “very high.”

In addition to the confirmed cases in new countries, the number of cases in countries like China, South Korea and Iran countries to rise.

Reports raising questions about the U.S response to the outbreak have added to the negative sentiment even as President Donald Trump continues to downplay the threat posed to the U.S.

The recent sell-off on Wall Street has dragged the major averages into correction territory, with some analysts saying stocks are now oversold after some described them as overbought just a few days ago.

Meanwhile, traders continue to ignore the latest U.S. economic reports, as the data does not reflect the latest developments on the coronavirus front.

Gold stocks have recently joined the sell-off by the broader markets, with the NYSE Arca Gold Bugs Index plummeting by 8.8 percent to its lowest intraday level in over three months.

The substantial weakness among gold stocks comes amid a steep drop by the price of the precious metal, as gold for April delivery is plunging $49.80 to $1,592.70 an ounce.

Significant weakness has also emerged among banking stocks, as reflected by the 4.1 percent nosedive by the KBW Bank Index. The index has fallen to a six-month intraday due to recent drop in treasury yields.

Utilities, pharmaceutical, and housing stocks are also seeing considerable weakness amid another broad based sell-off on Wall Street.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both nosedived by 3.7 percent, while Hong Kong’s Hang Seng Index slumped by 2.4 percent.

The major European markets have also shown substantial moves to the downside on the day. While the German DAX Index has plummeted by 4.8 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both down by 4.5 percent.

In the bond market, treasuries are extending the rally seen over the past few sessions, pushing the ten-year yield to a new record low. The yield on the benchmark ten-year note, which moves opposite of its price, is down by 13.2 basis points at 1.167 percent.

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