US shares plunged late Friday, capping a two-week win streak, as the coronavirus continues to wreak havoc in China to neighboring countries and heightened paranoia about the impact on global supply chains and economic growth.
Tech stocks were the biggest decliners in the S&P 500 Index, with the sector settling down 2 percent as traders weighed the possible fallout arising from the outbreak.
The Dow Jones Industrial Average ended 227.6 points lower, or 0.9 percent, at 28,992. It was the index's first close under 29,000 since February 4. The S&P 500 fell 1.2 percent to 3,337 while the Nasdaq Composite dropped by 1.7 percent to 9,577.
The DJIA had its worst daily output since February 7 while the S&P 500 reported its largest single-day drop since January 31. The Nasdaq hit its worst trading since January 27.
The results on the benchmark ten-year US Treasury note reached its lowest level since September, ending at 1.5 percent after earlier hitting an all-time low of 1.37 percent from 2016. Output on even longer-dated Treasuries was down to a record low. In contrast, prices of precious metals like gold rallied for their seventh straight trading to a seven-year peak and stretched their advances for the year to 8.3 percent.
Stocks of Microsoft Corp., Apple Inc., and Intel Corp. weighed heavily on the Dow Jones, as investors grew increasingly worried about widespread fallout from the Wuhan epidemic.
Forecasting agency IHS Markit reported its activity indexes for both factory and service-oriented companies fell this month. And the service sector hit the red zone for the first time since 2015.
In a major surprise, the index covering the big service aspect of the economy plummeted 4 points to 49.5, the agency disclosed late Friday. A metric of under 50 indicates a contraction in market activity.
The S&P 500 was also pressured by a 2.4 percent decline in the tech sector. Amazon, Apple, Facebook, Netflix, and Google-parent Alphabet all ended their sessions at least 1.6 percent lower to push down the Nasdaq lower. As a result, money poured into US equities, pushing the three decade-rate to a new low.
Even amid widespread fears of the epidemic, few economists are calling for a recession, and a large number of investors are aware of calling it quits on a 30-year long bull run in shares. The central bank's three interest-rate cuts in 2019 have likewise lifted positivism that the Federal Reserve can help buoy existing expansions.
Jitters about a looming recession hogged the headlines in 2019, only to ebb shortly after, helping the S&P 500 finish its most impressive year since 2013 and underscoring the challenge many venture capitalists face in trying to time the market.
