BREAKING: Investors' growing fears about virus outbreak sends Dow Jones Industrial Average down nearly 1,200 points. The losses extend a weeklong rout in stocks that has wiped out gains the major indexes had posted early this year.
The Dow Jones Industrial Average sank nearly 1,200 points Thursday, deepening a weeklong global market rout caused by worries that the coronavirus outbreak will wreak havoc on the global economy.
“This is a market that’s being driven completely by fear,” said Elaine Stokes, portfolio manager at Loomis Sayles, with market movements following the classic characteristics of a fear trade: stocks are down, commodities are down and bonds are up. The virus has now infected more than 82,000 people globally and is worrying governments with its rapid spread beyond the epicenter of China.
Besides a sharply weaker Chinese economy in the first quarter of this year, he sees lower demand for U.S. exporters, disruptions to supply chains and general uncertainty eating away at earnings growth. Traders are growing increasingly certain that the Federal Reserve will be forced to cut interest rates to protect the economy, and soon. They’re pricing in a nearly two-in-three probability of a cut at the Fed’s next meeting in March. Just a day before, they were calling for only a one-in-three chance, according to CME Group.
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