NO MASKING IT
Despite late rally, markets wrap up worst week since ’08 on virus fears
U.S. stocks sank again on Wall Street Friday, pushing the S&P 500 index down another 2.8% and putting the market on track for its worst week since October 2008.
The Dow Jones Industrial Average lost 357 points, or 1.4%, to 25,409. The S&P 500 lost 24 points, or 0.8%, to 2,954.
The benchmark index has lost 13% since hitting a record high 10 days ago.
The Nasdaq rose 1 point to 8,567.
The market clawed back much of its intraday losses in the last 15 minutes of trading.
Bond prices soared as investors sought safety, pushing yields to record lows. The stock swoon is being driven by fear that the coronavirus outbreak will derail the global economy.
The virus outbreak has been shutting down industrial centers, emptying shops and severely crimping travel all over the world. More companies are warning investors that their finances will take a hit because of disruptions to supply chains and sales. Governments are taking increasingly drastic measures as they scramble to contain the virus.
The market’s losses moderated somewhat after the Federal Reserve released a statement saying it stood ready to help the economy if needed. Investors increasingly expect the Fed to cut rates at its next policy meeting in mid-March.
The Dow Jones was down as many as 1,085 points in early trading.
The S&P 500 is now 14.5% below the record high it reached just 10 days ago. Overseas markets also fell. China’s benchmark index fell 3.7% and Germany’s DAX fell 3.9%.
The rout has knocked every major index into what market watchers call a “correction,” or a fall of 10% or more from a peak. The last time that occurred was in late 2018, as a tariff war with China was escalating. Market watchers have said for months that stocks were heavily overpriced and long overdue for another pullback.
Financial, health care and technology stocks were among the biggest losers in Friday’s broad market slide. Energy, the worst performing sector this year, held up best.
Bond prices soared again as investors sought safety and became more pessimistic about the economy’s prospects. That pushed yields to more record lows. The yield on the 10-year Treasury note fell sharply, to 1.14% from 1.30% late Thursday. That’s a record low, according to TradeWeb. That yield is a benchmark for home mortgages and many other kinds of loans.
Crude oil prices sank 4.9% over worries that global travel and shipping will be severely crimped and hurt demand for energy. The price of benchmark U.S. crude has now fallen 15% this week.
“All this says to us is that there are still a lot of worries in the market,” said Gene Goldman, chief investment officer at Cetera Financial Group. “We need the Fed to come out and say basically guys, we got your back.”