Bond yields, stocks drop as investors seek safety

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 of trading amid hints from Federal Reserve officials that they may offer more support to the economy.

By the end of trading, the S&P 500 had more than halved its losses 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 sent the index alternating between huge gains and losses this past week, and it’s a sign of how much uncertainty is dominating markets as investors try to guess how much economic damage the fast-spreading coronavirus will ultimately inflict.

“It’s anyone’s guess at this point why it rallied into the close,” said Adam Taback, chief investment officer for Wells Fargo Private Bank.

Earlier in the day, the S&P 500 had been down 4%. 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.

At the heart of the drops is the fear of the unknown. The virus usually causes only mild to moderate symptoms. But because it’s new, experts aren’t sure how far it will spread and how much damage it will ultimately do, both to health and to the economy.

Some investors are simply selling. Many analysts and investors say they expect the market’s sharp swings to continue as long as the number of new cases accelerates.