Roller-coaster week sparked by virus fears ends with bond yields, stocks sinking

NEW YORK — A dizzying, brutal week of trading dropped one last round of harrowing swings on investors Friday.

After skidding sharply through the day as fear pounded markets, steep drops for stocks and bond yields suddenly eased up in the last hour. By the end of trading, the S&P 500 had more than halved its loss for the day to 1.7% and even locked in a gain for the week.

It’s the latest lurch in a wild ride that has sent stocks flipping between huge gains and losses — mostly losses the last two weeks. Investors are trying to guess how much economic damage the coronavirus will ultimately inflict, and they’re shifting by the minute as the number of new infections piles up on one hand and central banks and governments offer stimulus on the other.

All the uncertainty has left markets churning.

Friday’s drop for the S&P 500 was the latest swing in a remarkably turbulent week. It started off with a 4.6% jump on Monday, then fell 2.8%, rose 4.2% and fell 3.4%. It was only two weeks ago that the S&P set a record high, on Feb. 19. It’s lost 12.2% since then.

Even more alarming was another breathtaking drop in Treasury yields to record lows.

The 10-year Treasury yield falls when investors are worried about a weaker economy and inflation, and it sank below 0.70% at one point. Earlier this week, it had never in history been below 1%. It was at 1.90% at the start of the year, before the virus fears took hold.

Even a better-than-expected report on U.S. jobs wasn’t enough to pull markets from the undertow. It’s usually the most anticipated piece of economic data each month, but investors looked past February’s solid hiring numbers because they came from before the new coronavirus was spreading quickly across the country.

“The bond market says the monster under the bed is much bigger and scarier than anyone expects right now,” said Ryan Detrick, senior market strategist at LPL Financial.