Wall Street’s main indexes were on track for their worst week since the 2008 global financial crisis on Friday as the selloff deepened on fears that the fast-spreading coronavirus could lead to a recession, Reuters writes.
As the world prepares for a likely pandemic, investors dumped equities and moved to the safety of U.S. Treasuries.
Traders increasingly pricing in an interest rate cut by the Federal Reserve in March sent the yield on the two-year note below 1% for the first time since 2016.
Rate-sensitive banks dropped 4.1% and weighed the most on the benchmark S&P 500 index. Financials fell 3.6% and was the top loser among the 11 S&P sectors.
The Dow Jones Industrials slumped more than 1,000 points in a volatile session and if the index closes below this level, it would be its fifth 1,000-point decline in history and the third this week.
The three indexes closed more than 10% below their recent record closing highs on Thursday.
“The uncertainty hovering over the markets will only be alleviated when there is a sense that the worst is almost over,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “Until then it is risk off.”
At 1:36 p.m. ET, the Dow Jones Industrial Average was down 493.38 points, or 1.91%, at 25,273.26 and the S&P 500 was down 41.04 points, or 1.38%, at 2,937.72. The Nasdaq Composite was down 58.87 points, or 0.69%, at 8,507.61.
Losses on the Nasdaq were limited by gains in technology companies including Microsoft Corp and Adobe, Reuters adds.
“Some investors are taking this as an opportunity to buy the dip,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.