U.S. stocks tumble amid global sell-off; Dow falls 325

U.S. stocks tumbled Monday afternoon after China announced a sharp rise in cases of a new virus that threatens to crimp global economic growth.

The Dow Jones Industrial Average and S&P 500 each fell about 1.1%, giving up a significant portion of their gains for January. Airlines, resorts and other companies that rely on travel and tourism suffered steep losses. Gold prices rose as did bonds as investors headed for safer holdings. The yield on the 10-year Treasury

fell to 1.61%, its lowest level since October.

The market’s slide, which followed a sell-off in markets in Europe and Japan, had the benchmark S&P 500 index on track for its worst day since early October.

Investors are in a “sell first, ask questions later situation,” said Alec Young, managing director of global markets research at FTSE Russell.

Chinese health authorities have confirmed 2,750 cases of the virus along with 81 related deaths as authorities extended a week-long public holiday by an extra three days as a precaution against having the virus spread still further. The virus has spread to a dozen countries, including the U.S. Besides the threat to people’s lives and health, investors are worried about how much damage the virus will do to profits for companies around the world.

The Dow Jones Industrial

Average fell 325 points, or 1.1%, to 28,664 as of 1:34 p.m. EST. The Dow had been down nearly 550 points. The S&P 500 index dropped 37 points, or 1.1%, to 3,257. The Nasdaq lost 132 points, or 1.4%, to 9,182. The Russell 2000 index of smaller company stocks gave up 0.8% to 1,649.