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Asian markets continue to slump, as Nikkei enters correction territory

Asian stocks fell sharply lower in early trading Friday, as Japan’s Nikkei sank to into correction territory as coronavirus fears continued to rattle global markets.

The Nikkei plunged 4% NIK, -4.20% , bringing the index down 10.8% from recent highs. While new data showed Japan’s manufacturing output rose more than expected in January, economist Takeshi Minami warned output will likely decline until the outbreak is over — potentially not until summer, according to Reuters.

Prime Minister Shinzo Abe promised Friday he was willing to make policy moves in order to avoid economic damage. “If developments change, we’ll ensure to take steps as needed to prevent the virus from becoming a huge downside risk to Japan’s economy,” he told parliament, Reuters reported.

On Thursday, Abe asked all schools in Japan to close for a month in an effort to stop the spread of the virus. On Friday, Tokyo Disney Resort operator Oriental Land Co. 4661, +0.90%  said it would close its theme parks for two weeks, per a request by the government to cancel or postpone major public events.

Hong Kong’s Hang Seng Index HSI, -2.76%  fell 2.6%, while the Shanghai Composite SHCOMP, -3.06%  slid 2.9% and the smaller-cap Shenzhen Composite 399106, -3.85%  dove 3.6%. South Korea’s Kospi 180721, -3.11%  tumbled 3%. Stocks inched up in Malaysia FBMKLCI, -1.47% , but sank in Taiwan Y9999, -1.24% , Singapore STI, -2.80%  and Indonesia JAKIDX, -4.04% . Australia’s S&P/ASX 200 XJO, -3.25% retreated 2.9%.

Among individual stocks, Hitachi 6501, -5.49% , SoftBank 9984, -4.24% , Toyota 7203, -4.43%  and Sony 6758, -3.84%  dropped in Tokyo trading. In Hong Kong, Apple component maker AAC 2018, -7.04% slid, along with Geely Automobile 175, -6.38% , oil producer CNOOC 883, -4.47%  and Wharf Real Estate 1997, -6.90% . Samsung 005930, -2.50%  and LG Electrionics 066570, -3.21%  fell in South Korea, while BHP BHP, -4.52% , Rio Tinto RIO, -3.47%  and National Australia Bank NAB, -3.05%  declined in Australia.

Fears of the coronavirus’ spread “have become full-blown across the globe as cases outside China climb,” DBS analysts Chang Wei Liang and Eugene Leow said in a report, according to the Associated Press.

New COVID-19 cases have sprung up around the globe in recent days, with trade and industry threatened by mass quarantines and shutdowns.

Goldman Sachs analysts on Thursday warned the outbreak could wipe out U.S. earnings growth this year, though they expect the S&P 500 to rebound by the end of the year.

Thursday on Wall Street, stocks plunged for a sixth straight day as all three benchmark indexes closed in correction territory, defined as a decline of at least 10%, but no more than 20%, from a recent peak.

The Dow Jones Industrial Average DJIA, -4.42%  lost 1,190.90 points, or 4.4%, to close at 25,766.60, while the S&P 500 SPX, -4.42%  shed 137.63 points, or 4.4%, to end at 2,978.76. The Nasdaq Composite COMP, -4.61%  slumped 414.29 points, or 4.6%, closing at 8,566.48.

Benchmark U.S. crude CLJ20, -3.06%  slid more than 2% in electronic trading on the New York Mercantile Exchange. The contract lost 3.4% on Thursday to settle at $47.09. Brent crude oil BRNJ20, -2.53% , the global benchmark, sank 2% to $51.19 per barrel in London after falling $1.25 on Thursday to $52.18 a barrel.

The dollar USDJPY, -0.60%  fell to 108.94 yen from 109.58 yen Thursday.

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Citigroup, Goldman, JPMorgan Slash Earnings Estimates for Stocks

Citigroup Inc. now expects zero growth in global earnings for 2020 as the coronavirus throttles economic growth. And it warns even the new forecast may prove too optimistic.

The bank’s call on earnings per share follows moves Thursday by Wall Street peers Goldman Sachs Group Inc. and JPMorgan Chase & Co. to cut profit estimates on U.S. companies. Goldman expects no earnings gain for American firms this year.

“Given obvious further risks to global GDP, it seems prudent to forecast flat global EPS in 2020,” Citigroup analysts including chief global equity strategist Robert Buckland wrote in a research report dated Feb. 27. The bank expected 4% growth at the start of the year.

“Maybe even flat EPS is too optimistic,” the team wrote. “If the virus slows global economic growth to 2.0% in 2020, our models suggest global EPS could contract around 10%.”

Global equities have sold off precipitously, with MSCI’s all-country stock index dropping more than 10% over its seven consecutive days of decline. The S&P 500 is down 11% so far this week, in the fastest correction from a record high in history.

Investors have been scrambling to evaluate the epidemic’s impact on the global economy as it spreads to more countries, throws supply chains into chaos and restricts movement of people and goods.

Citigroup lowered its target on the local-currency MSCI All Country World Index to 660 by the end of the year, down from a previous target of 690. That would still mark a gain of about 7.5% from current levels. The index was at 613.95 at 10:30 a.m. Hong Kong time.

“We would prefer it to be closer to panic before going all-in. It is not there yet,” the analysts said. “Our global bear-market checklist still says buy this dip, although our U.S. panic-euphoria indicator says not yet.”

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Indonesian Stocks Drop to Two-Year Low, Headed for Bear Market

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Indonesian stocks slumped to a two-year low, headed for a bear market as investors grew increasingly jittery over the economic impact of the fast spreading coronavirus on Southeast Asia’s largest economy.

The Jakarta Composite Index fell as much as 3.7% Friday, down 20% from its February 2018 record high. The benchmark gauge is down 10% this month, heading for its worst such performance since October 2008.

Foreign investors have net sold almost $300 million of Indonesian shares this week as the nation’s currency and bonds were also routed. While the rupiah is down 2.4% this week, the yield on benchmark 10-year government bonds has risen more than 25 basis points, according to data compiled by Bloomberg.

“Indonesian stocks are falling along with global equities amid concerns on global economic slowdown from this outbreak of coronavirus,” said John Teja, a director at PT Ciptadana Sekuritas Asia. “Nothing is spared in Indonesia, even the defensive consumer stocks are getting hit.”

Shares of consumer goods company PT Unilever Indonesia fell as much as 5.9%, while PT Bank Central Asia dropped 4.1% and PT Astra International slipped 5.5%, among the biggest drags on the Jakarta Composite.

With no confirmed case of coronavirus in Indonesia so far, and the market’s reliance on the domestic economy, the rout in the nation’s equities should be nearing an end, according Thendra Crisnanda, head of research at PT MNC Sekuritas.

“The index should reach the bottom between February and March,” Crisnanda said. “The impact of the virus on Indonesia isn’t significant and our domestic economy will remain resilient. This is a good time for investors to buy as valuation has been low and the dividend season is coming soon.”

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America scrambles to address mounting coronavirus crisis

Coronavirus not a major problem in US, but we need more test kits: Dr. Siegel

Fox News medical correspondent Dr. Marc Siegel shares his insights on the spread of the coronavirus globally.

VACAVILLE, Calif. (AP) — Public health officials were retracing the steps of a Northern California woman on Thursday believed to be the first person in the U.S. to contract the highly contagious coronavirus without traveling internationally or being in close contact with anyone who had it.

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California Governor Gavin Newsom speaks to members of the press at a news conference in Sacramento, Calif., Thursday, Feb. 27, 2020. Newsom spoke about the state’s response to novel coronavirus, also known as COVID-19. Yesterday, the Centers for Dise

The diagnosis, confirmed Wednesday, marks an escalation of the worldwide outbreak in the U.S. because it means the virus could now spread beyond the reach of quarantines and other preventative measures. But state health officials were quick to reassure the public on Thursday that such a scenario was inevitable and the risk of widespread transmission remained low.

The case raised questions about how quickly public health officials are moving to diagnose and treat new cases. State and federal health officials disagreed about when doctors first requested the woman be tested.

DOW'S POINT DROP WORST ON RECORD AS STOCKS FALL INTO CORRECTION

Doctors at the UC Davis Medical Center said they asked the U.S. Centers for Disease Control and Prevention to test the woman for the virus on Feb. 19. But they said the CDC did not approve the testing until Sunday “since the patient did not fit the existing CDC criteria” for the virus, according to a memo posted to the hospital's website.

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Tourists in quarantine gather at the terrace of the H10 Costa Adeje Palace hotel in La Caleta, in the Canary island of Tenerife, Spain, Thursday, Feb. 27, 2020. (AP Photo/Joan Mateu)

CDC spokesman Richard Quartarone said a preliminary review of agency records indicates the agency did not know about the woman until Sunday, the same day the woman was first tested.

Quartarone said the agency is concerned about reports of delayed testing and is “investigating this carefully.” He said the CDC can test about 400 specimens per day.

California Gov. Gavin Newsom said the state was limited in how many people it could test because it only had 200 testing kits. But he said federal officials have promised to send many more in the coming days.

“I’m not going to politicize this moment And I’m not going to point fingers," Newsom said. “We have had a very strong working relationship with the (Trump) administration.”

TRUMP MAY INVOKE EMERGENCY POWERS TO RAMP UP AMERICA'S CORONAVIRUS DEFENSE

Investigators were focused on tracing the woman's movements to figure out how she got the virus and who else she may have unwittingly infected. The woman first sought treatment at NorthBay VacaValley Hospital in Vacaville, a city of more than 100,000 people about 59 miles (95 kilometers) from San Francisco.

Ten experts from the CDC arrived Thursday and were heading to Vacaville to help with the search, said Dr. James Watt, interim state epidemiologist at the California Department of Public Health.

With the patient as ground zero, they are interviewing immediate family members. Then, as with any similar case, they are expanding the net to include more distant family members who may have been in contact, social events the patient may have attended, like going to church. Did she go to work? Attend a concert?

They are not too worried, for now, about casual contact, because federal officials think the coronavirus is spread only through “close contact, being within six feet of somebody for what they’re calling a prolonged period of time,” said Watt, who was the state’s deputy epidemiologist for 10 years before he took the interim post two months ago.

“That’s more than casual contact at a grocery store,” Watt said. “That’s where our focus is going to be. … What was the pattern of disease transmission?”

CORONAVIRUS WRECKS MARKETS, BUSINESS PLANS, AND CONFERENCES AS PANIC WORSENS

All of the 59 other cases in the U.S. have been for people who had traveled abroad or had close contact with others who traveled.

Earlier U.S. cases included 14 in people who returned from outbreak areas in China, or their spouses; three people who were evacuated from the central China city of Wuhan; and 42 American passengers on the Diamond Princess cruise ship who were evacuated by the federal government to the U.S. from where the ship was docked in Japan.

Some of those people have been treated at Travis Air Force Base, located in Solano County where the Northern California woman lives. But there is no evidence the woman has any connection to the base, said Sonia Angell, director of the California Department of Public Health.

The global count of those sickened by the virus hovered Thursday around 82,000, with 433 new cases reported in China and another 505 in South Korea.

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The new virus is a member of the coronavirus family that can cause colds or more serious illnesses such as SARS and MERS.

The virus can cause fever, coughing, wheezing and pneumonia. Health officials think it spreads mainly from droplets when an infected person coughs or sneezes, similar to how the flu spreads.

Officials are advising people to take steps to avoid infection with coronavirus or other respiratory infections like colds or the flu, including washing hands with soap and water and avoiding close contact with people who are sick.

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Here are 5 reasons the stock market is having its worst decline since 2008, and only one of them is the coronavirus

The U.S. stock-market rally has unraveled, with a period of historic gains coming to a screeching halt, as fear that the coronavirus epidemic may reach America rattles Wall Street.

The Dow Jones Industrial AverageDJIA, -4.42%fell into correction on Thursday, widely defined as a drop of at least 10%, but no more than 20%, from a recent peak. The S&P 500 index and the Nasdaq Composite indexes all joined the blue chips in correction territory.

However, it is the speed at which the indexes fell into these conditions that has surprised investors and some experts on Wall Street. It was the fastest decline into correction for the Dow, 10 sessions, since the nine-session slump into correction on Feb. 8, 2018.

Corrections from a Record Close
Record Close Enters Correction Date Trading days
Nov. 3, 1919 Nov. 12, 1919 7
Nov. 28, 1928 Dec. 8, 1928 8
Jan. 26, 2018 Feb. 8, 2018 9
Feb. 12, 2020 Feb. 27, 2020 10
Sept. 23, 1955 Oct. 11, 1955 12

For both the S&P 500 SPX, -4.42%and the Nasdaq COMP, -4.61%, it was the fastest retreat on record from a record high, six sessions ago, to correction.

Thursday’s declines also put all three equity indexes on pace for their worst weeks since the 2008 financial crisis.

Here’s are 5 reasons that the market is falling:

Fear of the COVID-19 disease infecting the U.S. is intensifying. The illness derived from the novel coronavirus, SARS-COV-2, which originated in Wuhan, China, late last year, is starting to affect global trade and travel and taking a bite out of confidence about earnings and economic growth.

Seven days ago, Goldman Sachs chief global equity strategist Peter Oppenheimer told clients that “in the nearer term…we believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high.”

Goldman made a similar call on Thursday, this time from strategist David Kostin, saying there would be no earnings growth in 2020.

Risks have intensified since Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention, said on Tuesday that “the disruption of daily life might be severe.”

President Donald Trump’s coronavirus news conference on Wednesday failed to provide investors with much comfort, mostly because it is difficult to predict how the virus will play out here and elsewhere.

The World Health Organization hasn’t declared the viral infection a pandemic, but the disease, from the family of viruses known as SARS, or severe acute respiratory syndrome, has sickened people in China, South Korea, Japan, Malaysia, Italy and Iran. And according to Reuters, Austria, Spain, Croatia and Switzerland have also confirmed their first cases.

The virus has virtually crippled swaths of manufacturing in China, the world’s second-largest economy, and the country is a big buyer of products and services from other countries. U.S. technology companies such as Apple Inc.AAPL, -6.54%depend on Chinese supplies.

At last check, COVID-19 has sickened 82,550 people, and claimed 2,810 lives.

Investors don’t know how long the outbreak will last, and it is too early to determine to what degree it will hurt corporate earnings, but a number of companies, including Hasbro Inc.HAS, -3.62%, HP Inc.HPQ, -3.65%and Mastercard Inc.MA, -4.10%, have already said that they think it will.

Check out: What Apple, Microsoft, Nike and other U.S. companies are saying about the coronavirus outbreak

Also read: Consumer-facing companies will be the first hit if the coronavirus spreads across the U.S.

Related: Here’s how the 30 Dow industrials companies are prepping for the impact of the coronavirus

Uncertainty about the U.S. presidential election’s outcome is also starting to drive markets, strategists and analysts argue. A number of them think that if Sen. Bernie Sanders, an independent from Vermont who characterizes himself as a democratic socialist, wins the Democratic presidential nomination, and possibly even the presidency, stocks would take a hit as he is perceived by some as an antibusiness candidate. “The risk to U.S. stocks is pretty significant if Bernie gets the nomination,” said Ed Moya, a senior market analyst with Oanda.

Even before the market slump this week, the value of stocks has been viewed as rich.

One measure of stock-market values showed that the S&P 500 index was trading at 18.9 times the weighted aggregate consensus forward earnings estimate among analysts polled by MarketWatch. That is up from 16.2 a year ago, and, aside from a brief point early in 2018, it is the highest forward price-to-earnings ratio for the benchmark index since May 2002.

Government bonds yields have been sliding steadily as investors seek havens, and thus drive up bond prices, amid doubts about global economic growth in the wake of the coronavirus outbreak.

The 10-year Treasury note yieldTMUBMUSD10Y, -1.13%fell to a record low below 1.24% on Thursday at one point.

Bond investors fear that the coronavirus might result in a global economic slowdown that might wash up on U.S. shores as a full-fledged recession. MarketWatch economics writer Rex Nutting explained the potential for an uncontained outbreak of COVID-19 this way: “Much of the immediate economic impact of a pandemic can be traced to the efforts to contain it, rather than from the effects of the disease itself. As we attempt to quarantine those who might spread the disease, we shut down a lot of economic activity.”

A Congressional Budget Office study found that a pandemic “could produce a short-run impact on the worldwide economy similar in depth and duration to that of an average postwar recession in the United States.”

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Trump mulls emergency move to ramp up production of coronavirus protective gear

Will coronavirus have long-term impact on markets?

Money Map Press chief investment strategist Keith Fitz-Gerald, David Dietze of Point View Wealth Management and Payne Capital senior wealth adviser Courtney Dominguez share insights on how the coronavirus is impacting the stock market.

WASHINGTON (Reuters) – President Donald Trump’s administration is considering invoking special powers through a law called the Defense Production Act to rapidly expand domestic manufacturing of protective masks and clothing to combat the coronavirus in the United States, two U.S. officials told Reuters.

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The use of the law, passed by Congress in 1950 at the outset of the Korean War, would mark an escalation of the administration’s response to the outbreak. The virus first surfaced in China and has since spread to other countries including the United States.

U.S. health officials have told Americans to begin preparing for the spread of the virus in the United States.

APPLE CEO TIM COOK: CHINA GETTING CORONAVIRUS UNDER CONTROL

The law grants the president the power to expand industrial production of key materials or products for national security and other reasons. The biggest producers of face masks in the United States include 3M Corp, Honeywell International Inc and Kimberly-Clark Corp.

President Donald Trump, with members of the president’s coronavirus task force, speaks during a news conference in the Brady Press Briefing Room of the White House, Wednesday, Feb. 26, 2020, in Washington. (AP Photo/Evan Vucci)

Trump, a Republican seeking re-election on Nov. 3, has faced criticism from Democrats over his administration’s response to the outbreak.

Health and Human Services (HHS) Secretary Alex Azar told lawmakers this week that the United States needs a stockpile of about 300 million N95 face masks – respiratory protective devices – to combat the spread of the virus. The United States currently has only a fraction of that number available for immediate use, Azar testified.

During an interagency call on Wednesday, officials from HHS and the Department of Homeland Security (DHS) discussed the possibility of invoking the Defense Production Act for the manufacture of “personal protective equipment” that can be worn to prevent infection, according to a DHS official.

CORONAVIRUS CRISIS: INSIDE THE GLOBAL HUNT FOR A CURE

Such equipment can include masks, gloves and body suits.

Azar said at a congressional hearing on Wednesday that China controls “a lot of the raw materials as well as the manufacturing capacity” related to face masks.

“Very little of this stuff is apparently made in the (United) States, so if we’re down to domestic capability to produce, it could get tough,” the DHS official told Reuters.

A White House official confirmed that the administration was exploring the use of the law to spur manufacturing of protective gear. Both the DHS official and the White House requested anonymity to discuss the issue.

“Let’s say ‘Company A’ makes a multitude of respiratory masks but they spend 80% of their assembly lines on masks that painters wear and only 20% on the N95,” the White House official said. “We will have the ability to tell corporations, ‘No, you change your production line so it is now 80% of the N95 masks and 20% of the other.’”

STOCKS TANK IN DAY THREE OF MASSIVE CORONAVIRUS SELL-OFF

“It allows you to basically direct things happening that need to get done,” the official added.

HHS declined to comment. DHS did not immediately respond to a request for comment.

‘VERY LOW’

President Donald Trump, with members of the President’s Coronavirus Task Force, during a news conference in the Brady Press Briefing Room of the White House, Wednesday, Feb. 26, 2020, in Washington. (AP Photo/Evan Vucci)

Trump said on Wednesday the coronavirus risk to the United States remained “very low,” but that federal health officials were prepared to take action and that Vice President Mike Pence would take control of the U.S. response.

Chuck Schumer, the top Senate Democrat, on Thursday accused Trump of “towering and dangerous incompetence” and said the president “must get his act together” on the coronavirus threat.

Invoking the Defense Production Act is one of a number of options under consideration by the administration to combat the virus, the officials said, and no final decision has been made. Trump invoked the law in 2017 to address technological shortfalls in a vaccine production capability and other items such as microelectronics.

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The law grants the president broad authority to “expedite and expand the supply of resources from the U.S. industrial base to support military, energy, space, and homeland security programs,” according to a summary on the Federal Emergency Management Agency website.

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Azar testified on Wednesday that the United States has a stockpile of around 12 million of the N95 masks that are in line with certifications from the U.S. National Institute for Occupational Safety and Health (NIOSH). HHS also has another 5 million N95 masks that are no longer NIOSH certified, Azar said, perhaps because they are past the expiration date.

In addition to those masks, the U.S. government has a stockpile of 30 million “gauze type” surgical masks, which the U.S. Centers for Disease Control and Prevention has said are less effective because they are loose-fitting.

Azar said the government needs a stockpile of approximately 300 million N95 masks.

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Gold Fails To Hold Early Gains, Settles Lower For 3rd Straight Day

Gold futures settled lower on Thursday, extending losses to a third straight session, amid expectations global central banks will cut interest rates, aiming to boost growth.

Traders were also tracking news on the virus front.

Gold futures for April ended down $0.60, or about 0.04%, at $1,642.50 an ounce.

On Wednesday, gold futures for April ended down $6.90, or 0.4%, at $1,643.10 an ounce, after losing $26.70, or 1.6%, a session earlier.

Silver futures for May ended down $0.179 at $17.735 an ounce, while Copper futures for May settled at $2.5715 per pound, down marginally from previous close.

Meanwhile, the dollar index dropped to 98.45, down 0.54% from Wednesday’s close.

In economic news, first-time claims for U.S. unemployment benefits climbed by more than expected in the week ended February 22nd, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims rose to 219,000, an increase of 8,000 from the previous week’s revised level of 211,000. Economists had expected jobless claims to inch up to 212,000 from the 210,000 originally reported for the previous week.

A report from the Commerce Department said durable goods orders edged down by 0.2% in January after spiking by an upwardly revised 2.9% in December. Economists had expected durable goods orders to slump by 1.5% compared to the 2.4% jump that had been reported for the previous month.

Another report from the Commerce Department said real gross domestic product increased by 2.1% in the fourth quarter, unchanged from the estimate provided last month.

Meanwhile, the number of coronavirus infections outside China, the source of the outbreak, for the first time surpassed those appearing in the country.

Officials are scrambling to contain the outbreak in Italy, which has reported 12 deaths and 400 confirmed cases in Europe’s worst outbreak of the virus.

More than 18 cases of the virus have been confirmed in both Germany and France, while two French patients have died from the disease.

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Dow industrials dives below first Fibonacci target, on the verge of 50% retracement

The Dow Jones Industrial Average has blown past the first key downside target based on the Fibonacci ratio, and is now on the verge of giving back half of what it gained during the past 14 months.

The DowDJIA, -4.42% plummeted 1,190.95 points, or 4.4%, on Thursday as fears of the impact of the global coronavirus outbreak intensify. The blue-chip barometer has now dropped 3,225.77 points, or 11.1% this week, and 3,784.78 points, or 12.8%, from its Feb. 12, 2019 record close of 29,551.42. Read Market Snapshot.

That means the Dow has retraced 48.8% of the rally off the Dec. 24, 2018 close of 21,792.20, which at the time was a 15-month low, to the record close.

Many Wall Street chart watchers who follow the Fibonacci ratio of 0.618, believe key retracement targets for a rally from a significant low to a significant peak are 38.2%, 50% and 61.8%. Retracements of 23.6% and 76.4% are also seen as secondary targets.

The Fibonacci ratio was made famous by a 13th century Italian mathematician known as Leonardo “Fibonacci” of Pisa. It is based on a sequence of whole numbers in which the sum of two adjacent numbers is equal to the next highest number (0, 1, 1, 2, 3, 5, 8, 11,…).

The ratio is also referred to as the golden ratio, or the divine ratio, because it has been found to be prevalent throughout nature, including the breeding pattern of rabbits, a seashell, the DNA double helix, ocean waves, flower petals and proportions of the human body. Technical analysts have adopted the ratio to help map the ebb and flow of financial markets.

“Rallies of all sizes do regularly eventually pull back at least to the 38.2%-50% Fibonacci levels,” wrote Andrew Adams, technical analyst at Saut Strategy, in a Wednesday research note.

Don’t miss: 5 charts to help unravel the Elliott Wave mystery.

The idea is, retracements that stay within 61.8% of the previous trend are still governed by that trend. If a retracement surpasses 61.8%, a new trend is believed to have begun, with a full retracement of the previous trend the first target.

For the Dow, the 38.2% target was 26,587.40. The 50% Fibonacci target is 25,671.81 and the 61.8% target at 24,756.22.

The S&P 500 indexSPX, -4.42% has also surpassed its first Fibonacci target, as it has retraced 39.4% of the rally off the Dec. 24, 2018 low of 2,351.10 of to the Feb. 19 record close of 3,386.15 (the 38.2% Fibonacci was 2,990.76). The 50% target is 2,868.63.

The Nasdaq CompositeCOMP, -4.61% has retraced 34.5% of its rally off the 6,192.92 low to its record high of 9,817.18; the first target is 8,432.71.

Meanwhile, the Dow Jones Transportation AverageDJT, -3.62% has retraced 68.2% of its rally off the December 2018 low of 8,637.15 to the 15-month high of 11,304.97 reached on Jan. 16, 2019, warning that a full retracement may be in the cards due. The 61.8% target was 9,656.26.

The Russell 2000RUT, -3.54% has retraced 47.3% of its rally off the December 2018 low of 1,266.93 to its Jan. 16, 2019, 16-month high of 1,705.21. The 50% target is at 1,486.07.

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Treasuries Pull Back Off Best Levels But Close Slightly Higher

After failing to sustain an early move to the upside, treasuries showed a lack of direction over the course of the trading day on Thursday.

Bond prices spent the afternoon bouncing back and forth across the unchanged line before closing slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 1.299 percent.

The ten-year yield closed lower for the sixth consecutive session, ending the day at another new record closing low.

The early strength among treasuries came as ongoing worries about the rapid spread of the coronavirus outbreak continued to boost the appeal of safe havens like bonds.

Adding to the concerns, the CDC confirmed a coronavirus infection in an American who reportedly did not have relevant travel history or exposure to another known patient with the disease.

The CDC said the patient’s exposure is currently unknown and could be the first instance of community spread of the virus in the U.S.

Microsoft (MSFT) also warned that it does not expect to meet its revenue guidance for a key segment that includes Windows due to the outbreak.

The software giant joins a growing list of big-name companies that have warned about the potential impact of the coronavirus.

In a note to clients, Goldman Sachs predicted U.S. companies will generate zero earnings growth in 2020 as a result of the outbreak.

President Donald Trump sought to downplay concerns about the coronavirus in a press conference on Wednesday, although critics have accused the president of failing to grasp the severity of the outbreak.

Meanwhile, traders largely shrugged off a slew of U.S. economic data, including reports showing a bigger than expected rebound in pending home sales and a much smaller than expected drop in durable goods orders.

The Treasury Department also revealed that this month’s auction of $32 billion worth of seven-year notes attracted above average demand.

The seven-year note auction drew a high yield of 1.247 percent and a bid-to-cover ratio of 2.49, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.39.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

News on the coronavirus front is likely to remain in focus on Friday, overshadowing reports on personal income and spending, consumer sentiment and Chicago-area business activity.

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Coronavirus wrecks markets, business plans, and conferences as panic worsens

New York prepared to tackle coronavirus, doctor says

System-wide Special Pathogens Program Dr. Syra Madad says New York has protocols and supplies to combat a possible coronavirus outbreak.

The spread of the new coronavirus around the world is hitting companies hard as they suspend production, meetings, events and business travel. Here's a look at the latest developments:

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MARKETS: Markets are down sharply again. The Dow and S&P were down over 2.5% in afternoon trading and Treasury yields dropped to record lows, a sign of caution among traders. After a mixed day in Asia, investors sold off shares more aggressively in Europe, where indexes were down over 3%. Shares in airlines were down as much as 10%.

CORONAVIRUS MAY SLASH $29 BILLION FROM AIRLINES' REVENUE

FACEBOOK GATHERING: Facebook says it is canceling F8, its annual conference for developers. The show had been scheduled to take place May 5-6 in San Jose, California. The company says it is planning other ways for its developer community to get together, including live streams, locally hosted events and videos. More than 5,000 people from around the world attended last year's F8. Facebook said it will donate $500,000 to organizations serving residents of San Jose.

PROFIT WARNINGS: AB Inbev, the world's biggest brewer, reported a significant drop in demand in China, leading to an estimated loss of $285 million in revenue so far. PayPal says the outbreak means it now expects 2020 revenue toward the lower end of its range of $4.78 billion to $4.84 billion. Frankfurt Airport is offering staff unpaid leave or temporary reductions in work hours as a way to manage the costs of a sharp drop in air traffic.

BUSINESS TRAVEL: Swiss food giant Nestle, the maker of Nespresso, Kit Kat and San Pellegrino, told its 291,000 employees worldwide not to travel internationally for business until March 15, while domestic travel should be replaced by “alternative methods of communication where possible." French cosmetics maker L’Oréal, which employs 86,000 people and owns the Maybelline and Lancome brands, issued a similar ban until March 31. Intel directed employees and contractors to avoid China, South Korea, Japan and other countries until further notice.

CORONAVIRUS COULD DRAG US ECONOMY INTO RECESSION: JANET YELLEN

AIRLINE FEES: JetBlue Airways is waiving extra fees of up to $200 for changing or canceling a ticket bought through March 11 for trips planned before June 1. JetBlue says it is trying to reassure customers who worry about getting hit later with a fee because of “evolving coronavirus concerns.” The move could put pressure on larger U.S. airlines to drop their change fees, which brought in more than $2.1 billion during the first nine months of last year.

CHINA: Small, mostly private companies that are the engine of China’s economy are back to operating at one-third of normal levels after anti-virus controls shut factories, shops and restaurants, regulators said Thursday. The ruling Communist Party expressed confidence that China's 18 million small and medium-size enterprises are recovering quickly. The category includes most of the privately owned restaurants, factories, stores and other companies that generate China's new jobs and wealth.

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TECH CONCERNS: Tech research firm IDC forecasts shipments of desktops, notebooks and tablets will fall 9% in 2020. Chinese factories making critical PC components have been hit by an extended shutdown that will cause a supply crunch in the second quarter, IDC said. The new forecast comes a day after Microsoft said it won't meet revenue targets that had already factored in the uncertainty. Meanwhile, IDC said smartphone shipments, already in decline because innovations have slowed down, will fall 2% this year. The biggest impact will be in the first half, when shipments are forecast to decline nearly 11%, as workers gradually return to the Chinese factories that make the phones.

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