Stocks fell once again Friday, capping their worst week since the financial crisis as worries over the coronavirus and its impact on the economy continued to rattle investor sentiment. More big-name companies warned they'll be affected, and countries are taking increasing drastic measures to contain the virus. The index had shed more than 11 per cent this week heading into Friday's session.
Microsoft became the second most important technology company on Wednesday after Apple warned that the coronavirus would affect its financial results.
The benchmark 10-year Treasury yield dipped below 1.25 on Thursday, hitting a record low.
The Labor Department said initial jobless claims edged up by 8,000 to a one-month high of 219,000 for the week ended February 22.
Tokyo and Shanghai closed 3.7% lower.
On Wall Street, the Dow Jones had recorded its biggest one-day point drop ever, closing down 1,191 points at 25,760, while in London the FTSE 100 dropped another 3.5 per cent to 6796.4. Las Vegas Sands has lost more than 10% week to date.
Declining issues outnumbered advancing ones on the NYSE by a 5.56-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored decliners.
Airlines and cruise operators have suffered some of the worst hits as flight routes are cancelled, along with travel plans. USA stocks were poised to conclude their worst week since 2008, reflecting diminishing expectations for the global economy due to the COVID-19 epidemic in China and the spread of the illness to other countries.
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Craig Johnson, president of Customer Growth Partners, a consumer consultancy, says he had expected annual retail sales to be up 4.1%, but he now says it could increase just 2.2% if the impact of the new virus in China persists beyond April. South Korea, meanwhile, confirmed more than 500 new cases.
In commodities trading Thursday, benchmark crude oil fell $1.64 to settle at $47.09 a barrel. Oil prices slumped on expectations industrial activity and demand might contract.
Caterpillar, a bellwether stock for global growth, slid 2.3%.
However, stocks pared losses slightly after the U.S. Federal Reserve Chair Jerome Powell said the fundamentals of the U.S. economy remained strong and that the central bank will act as appropriate to provide support.
"U.S. companies will generate no earnings growth in 2020", the firm wrote in a note to clients on Thursday.
Besides a sharply weaker Chinese economy in the first quarter of this year, he sees lower demand for US exporters, disruptions to supply chains and general uncertainty eating away at earnings growth.
Such cuts are even more impactful now because stocks are already trading at high levels relative to their earnings, raising the risk. The American Dow, pan-European Stoxx 600 and French and German markets all entered corrections too in another brutal day of selling. The Nasdaq fell 206 points, or 2.4%, to 8,360. Just a day before, they were calling for only a 33% chance, according to CME Group.