Stocks sink, bonds soar on virus fears

Stocks fell sharply again on Wall Street Tuesday, piling on losses a day after the market’s biggest drop in two years as fears spread that the growing virus outbreak will put the brakes on the global economy.

Nervous investors snapped up low-risk U.S. government bonds, sending the yield on the 10-year Treasury note to a record low.

The S&P 500 has lost 7.6 percent in the last four days since hitting a record high last Wednesday. That’s the benchmark index’s worst such stretch since the end of 2018, resulting in $2.14 trillion in losses, according to S&P Global. Tuesday also marked the first back-to-back 3 percent losses for the index since the summer of 2015.

The Dow Jones Industrial Average dropped 879 points, for a two-day loss of 1,911 points. Travel-related stocks took another drubbing, bringing the two-day loss for American Airlines to 16.9 percent. The large publicly traded cruise operators have also suffered double-digit losses.

The worst-case scenario for investors — where the virus spreads around the world and cripples supply chains and the global economy — hasn’t changed in the last few weeks. But the probability of it happening has risen, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Bond prices continued rising. The yield on the 10-year Treasury fell as low as 1.31 percent, a record, according to TradeWeb, before recovering somewhat to 1.35 percent in the late afternoon. The yield is down from 1.37 percent late Monday and far below the 1.90 percent it stood at in early 2020.

The S&P 500 index fell 97.68 points, or 3 percent, to 3,128.21. The Dow sank 879.44 points, or 3.2 percent, to 27,081.36, following a drop of more than 1,000 points Monday.

The Nasdaq lost 255.67 points, or 2.8 percent, to 8,965.61. The Russell 200 index of smaller company stocks dropped 56.21 points, or 3.5 percent, to 1,571.90.