January threw stock investors a few curveballs.
They faced simmering tensions with Iran at the start of the month. Then the market’s mood got a boost in mid-January following a partially resolved trade dispute with China.
But now a new fear looms: the outbreak of a coronavirus in China that has spread around the world.
The coronavirus has infected almost 10,000 people globally, and has prompted the World Health Organization to declare the outbreak a global health emergency.
The latest developments sent stocks tumbling Friday. The Dow Jones industrial average plunged 603.41 points, wiping out its gains for the year.
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The broad losses hit hitting everything from airlines to resort operators to technology companies, with stocks recording their worst January since 2016.
Investors flocked to safe-haven corners of the market, a sign they’re unsure how the potential global economic fallout from the virus could play out, analysts say.
A widely watched recession predictor raised worries. The yield on the 10-year Treasury note fell below the yield of the three-month bill recently. The phenomenon, known as an inverted yield curve, is often a harbinger of an economic slowdown.
The yield on the 10-year Treasury fell to 1.51% from 1.55% late Thursday.
“Investors, companies and governments have taken a cautious stance around this virus,” says Charlie Ripley, senior investment strategist at Allianz Investment Management. “Investors are watching to see whether this becomes a larger pandemic.”
Friday’s losses also erased the Standard & Poor’s 500 gains for 2020. The index skidded 1.8% Friday, putting it 0.2% lower for the month.
Coronavirus cases have spiked in China, along with deaths there, and the U.S. is now advising against all travel to the world’s second-largest economy. The move weighed on airline and energy stocks. It also helped push oil prices lower.
On Friday, American Airlines fell 3.1% and Delta Air Lines slipped 2.4% after both companies suspended flights to and from China.
Technology stocks led the losses. Apple, which relies on Chinese consumers for sales and factories for supplies, fell 4.4%. Nvidia slid 3.8% and other chipmakers slipped.
Alex Veiga from The Associated Press contributed to this article.