Stock market rout deepens on virus worries

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.

Bond prices soared again, sending the yield on the 10-year Treasury to another record low. When yields fall it's a sign that investors are feeling less confident about the strength of the economy going forward.

"Tremendous amount of volatility has come into capital markets around the world, largely as a result of a few distinctive phenomena," Eric Wiegand (WEE gan), Senior Portfolio manager, US Bank said.

"The most noteworthy obviously is the spread of this tragic Corona virus. Couple with that is announcements of some slowing economic activity as well. Corporations have elected to reduce guidance as a result of that uncertainty, and that's bringing down estimates."

The latest losses extended a slide in stocks that has wiped out the solid gains the major indexes had posted early this year.

The S&P 500 is now 12% below the all-time high it set just a week ago. This is now the stock market's worst week since October 2008, when Wall Street was mired in the financial crisis.

Investors came into 2020 feeling confident that the Federal Reserve would keep interest rates at low levels and the U.S.-China trade war posed less of a threat to company profits after the two sides reached a preliminary agreement in January. The virus outbreak has upended that rosy scenario as economists lower their expectations for economic growth and companies warn of a hit to their business.

The S&P 500 index's sharp decline from its last record high puts it in what market watchers call a "correction," a normal phenomenon that analysts have said was long overdue in this bull market, which is the longest in history.

The S&P 500 fell 137.63 points, or 4.4%, to 2,978.76, its biggest one-day drop since 2011.

The Dow fell 1,190.95 points, or 4.4%, to 25,766.64. The Nasdaq dropped 414.29 points, or 4.6%, to 8,566.48. The Russell 2000 index of smaller company stocks lost 54.89 points, or 3.5%, to 1,497.87.

The virus has now infected more than 82,000 people globally and is worrying governments with its rapid spread beyond the epicenter of China.