Dow sinks 1,000 points on alarm over virus spreading in United States

(Reuters) – Wall Street’s losses deepened and the Dow Jones Industrials shed 1,000 points in afternoon trading on Thursday as death toll in the United States rose to 11 and travel related stocks took a severe beating.

Technology giants Alphabet Inc, Inc, Facebook Inc and Microsoft Corp recommended their employees in Seattle work from home.

The state of California declared an emergency, a day after U.S. lawmakers approved an $8.3 billion bill to combat the outbreak.

Investors dumped stocks and rushed to the safe havens, boosting gold prices by 1.8% and pushing the yield on the benchmark 10-year U.S. Treasury to a record low. [US/]

“With bonds surging and yields at historic lows, concerns are we will get some kind of economic slowdown and it may be worse than initially factored in,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

As virus cripples travel demand, the International Air Transport Association flagged a potential $113 billion hit to global airline travel, sending the S&P 1500 Airlines Index down 8.1%.

Carrier Southwest issued a revenue warning, while United Airlines and JetBlue Airways cut flights and implemented cost controls.

Cruise operators Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise Line Holdings sunk between 14% and 17% as health officials screened people on a ship linked to a person’s death in California.

A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020. REUTERS/Andrew Kelly

The CBOE Volatility index, Wall Street’s fear gauge, jumped 8.2 points to 40.14.

At 1:20 p.m. ET, the Dow Jones Industrial Average was down 1,018.93 points, or 3.76%, at 26,071.93, the S&P 500 was down 114.27 points, or 3.65%, at 3,015.85. The Nasdaq Composite was down 284.86 points, or 3.16%, at 8,733.23.

All the major S&P sectors were in the red with a 5.3% fall in the interest-rate sensitive financials sector weighing the most.

The benchmark index, which fell almost 12% last week, its worst since the 2008 financial crisis, had recovered some poise on Wednesday on Joe Biden’s surge in the Democratic primaries.

The index, however, is still about 11% below its record close on Feb. 19.

The Labor Department’s data showed weekly jobless claims fell last week, indicating resilience in the domestic economy. However, analysts remained skeptical about the future.

“If we are headed towards a recession or if you are seeing pressure on travel and tourism, I would expect the jobless claims to worsen over the next few weeks,” said Mike Bailey, director of research at FBB Capital Partners in Bethesda, Maryland.

All eyes will now be on the crucial non-farm payrolls report on Friday.

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Declining issues outnumbered advancers for a 6.23-to-1 ratio on the NYSE and for a 4.76-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and 71 new lows, while the Nasdaq recorded 24 new highs and 253 new lows.

Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Patrick Graham and Arun Koyyur

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