Dow ends down 3.5% on coronavirus fears, worst drop in two years

The Dow dropped more than 1,000 points — its worst single-day point drop in two years — as the coronavirus epidemic spread beyond China and world leaders warned it could dampen global economic growth.

The Dow Jones industrial average on Monday ended the day down 1,031.40 points, or 3.56 percent, to 27,960.80 as the virus’s death toll climbed above 2,500 in China and spates of fresh cases emerged in countries such as Iran, Italy and South Korea.

The Nasdaq plunged 355.31 points, or 3.71 percent, to 9,221.28. The S&P 500 lost 111.86 points, or 3.35 percent, to 3,225.89.

“A place like Northern Italy is more difficult to contain, and that creates a new set of concerns,” explained Barry Bannister, head of institutional equity strategy for Stifel. “It is easier to contain a virus in China where you can lock down whole states.”

The outbreak, which has already slammed manufacturing and business activity in China, could cause global oil demand to shrink for the first time in a decade, international leaders say.

The International Monetary Fund on Monday warned the Group of 20, a forum of the world’s 20 largest economies, that the coronavirus could cut global growth by 0.1 percentage points, while Goldman Sachs slashed its first quarter GDP estimate by 0.2 points, to 1.2 percent from 1.4 percent.

Investor grew jittery Monday as the death toll in Italy hit seven and reported infections went over 150. The FTSE MIB index in Italy closed down 5.4 percent, while major indices in Paris and Germany each tumbled 3.9 and 4 percent, respectively.

The bond market also signaled that Monday’s panic over stock prices was widespread. Yields on 30-year US Treasury bonds hit a record low of 1.835 percent, indicating high demand for normally safe government bonds.

Gold, meanwhile, opened at a 7-year high of $1,688.46 before falling in the afternoon and then quickly recovering to end the day higher. The sudden midday drop came after a single, non-verified tweet claimed that the Bank for International Settlements, a Swiss-based international financial institution, was authorizing staff to start selling some of its gold, traders told The Post.

Three people trading gold on Monday told The Post that the tweet, posted at 2:25pm EST, was the first and only data point to start the gold sell-off.

Monday’s broad sell-off slammed major US airlines, with American and Delta shares plunging as much as 8.5 percent and 6.3 percent, respectively, as United Airlines fell as much as 3.3 percent.

Tech companies also took a hit — Apple stock dropped 4.8 percent to $298.81 while shares in chipmaker Intel fell 4 percent to $61.76. Tesla, which opened a factory in China last year, plunged 7.5 percent to finish at 833.79 on the day.

The latest selloff could deepen as corporate earnings reports and guidance reflect corporate pain from the outbreak, analysts said.

“The coronavirus might be slowing in mainland China, but the huge jump over the weekend to various other countries has many reassessing 2020 growth estimates,” Ryan Detrick, senior market strategist for LPL Financial, said in a statement.

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