US stocks, bond yields and oil prices fell sharply again on Friday, continuing a week of roller coasters as investors continued to weigh on the global economic disruption caused by the virus epidemic.
Dow Jones’ industrial average fell 256.50 points to close at 25,864.78, reducing losses after briefly sliding close to 900 points. The Standard and Poor’s 500 fell 1.7% to 2,972.37, which pushed the broad index 12% from its recent peak. The Nasdaq index, rich in technology, lost 1.9% to finish at 8,575.62. The top three indices posted weekly gains.
“February’s employment report showed remarkably healthy job fundamentals before the coronavirus outbreak,” said Gregory Daco, chief US economist at Oxford Economics, in a note. “But while solid jobs and stable wage gains have boosted consumers’ immune systems, the virus is almost certain to infect their spending will.”
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Markets have suffered from the ups and downs of a roller coaster for weeks with uncertainty about the damage the new coronavirus epidemic will cause to the global economy.
As of Friday, the total number of coronavirus cases worldwide has exceeded 100,000. The increasing number of infections worldwide, as well as continued disruptions in supply chains, threaten to have “deeper restrictions” and more sustainable “of American growth, said Lindsey Piegza, chief economist at Stifel Nicolaus, in a note.
This could put the Federal Reserve in a position to further cut interest rates to help cushion the economy, said Piegza. The Fed surprised Wall Street and cut rates Tuesday, the first of these outside of a regular meeting since the 2008 global financial crisis.
Rumors that Chinese officials may be exaggerating the extent to which local businesses are getting back to work were also undermining confidence, traders said.
“At this point, no one can really explain why the markets behave the way they do and what the next step may be. The only thing we can say is that this high volatility is bad, “said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Bond yields fell to new lows on Friday as traders expected central banks to be forced to cut interest rates and flocked to public debt as a safe haven.
The 10-year Treasury yield drops when investors worry about a weaker economy and future inflation, and fell below 0.70% in the morning. Earlier this week, it had never been below 1% in history. It was 1.90% at the start of the year, before viral fears took hold.
The 10-year Treasury yield fell to 0.73% from 0.92% on Thursday evening.
Crude oil lost 10% after OPEC and its key ally Russia failed to agree on a cut in oil production on Friday, a move that would have contained the resulting crude price drop by the massive disruption of the new coronavirus to world affairs.
The price of crude oil has dropped more than 25% since the start of the virus epidemic.
In Europe, the French CAC 40 lost 4.1%, while the German DAX fell 3.4%. The British FTSE 100 lost 3.6%. The Japanese benchmark Nikkei plunged 2.7%. The Australian S & P / ASX 200 lost 2.8%. The Hong Kong Hang Seng fell 2.3%.
Contributor: The Associated Press