Monday's Stock Market Open: US Equities Plunge, Dow Down 940, As Coronavirus Cases Outside China Surge

Update: 12:05 p.m. EST:

U.S. stocks incurred deep losses by noon on Monday as traders appeared spooked by a spike in coronavirus cases far outside China, including in Iran and Italy.

The Dow Jones Industrial Average fell 936.05 points to 28,056.36 while the S&P 500 dropped 104.44 points to 3,233.31 and the Nasdaq Composite Index tumbled 353.76 points to 9,222.83.

In Europe markets plunged, as Britain’s FTSE-100 fell 3.34%, France’s CAC-40 slashed 3.94% and Germany’s DAX dropped 4.01%.

Crude oil futures tanked 4.91% at $50.76 per barrel and Brent crude plunged 6.12% at $54.92.

Original story:

U.S. stocks plummeted at the opening on Monday as the number of coronavirus cases outside China surged, raising fears of a prolonged global economic slowdown. The epidemic has now spread to more than 30 countries.

The Dow Jones Industrial Average fell 946.62 points to 28,045.79 while the S&P 500 dropped 101.57 points to 3,236.18 and the Nasdaq Composite Index tumbled 373.04 points to 9,203.55.

Over the weekend, the virus spread in other countries, including South Korea which upgraded its coronavirus alert to the “highest level.” South Korea now has more than 800 confirmed cases, the highest outside mainland China. Italy now has more than 200 cases and five deaths. Cases of the virus have also spiked in Iran.

China now has 77,150 confirmed cases.

“Until last week [the virus] was largely contained in terms of growth of new cases and growth in fatalities to China,” said Tim Graf, head of macro strategy at State Street. “And there was also a belief that whatever policy response might come, it would be forceful enough that you would see a V- or U-shaped recovery. But perhaps today we’re starting to see that might be a little more complicated.”

Malaysian Prime Minister Mahathir Mohamad resigned on Monday morning.

The Federal Reserve Bank of Chicago's National Activity Index jumped to minus-0.25 in January from minus-0.51

“I’ve now come to the view that equity markets, global equity markets, have to reprice to take into account or fully discount the dramatic economic impact that all of this [coronavirus] is going to have,” said Jonathan Pain, author of The Pain Report, on Monday morning in Asia. “I believe that repricing … has just started and I think it’s gonna be approximately 20% to 25% in the next month or so. I don’t think there’s a letter in the alphabet which adequately describes the profile of the economic shock that … we’re beginning to see. Of course there will be a recovery at some point in time, however, we don’t know when that point in time is.”

Investor Warren Buffett said the spread of the virus “softened” the U.S. economy, but assured it’s still healthy. “Business is down but it’s down from a very good level,” Buffett told CNBC.” “You look at car holdings -- railcar holdings, moving goods around. And there again, that was affected by the [Chinese] tariffs too because people front-ended purchases, all kinds of things.”

Overnight in Asia, markets finished lower. China’s Shanghai Composite slipped 0.28%, while Hong Kong’s Hang Seng dropped 1.79%, and Japan’s Nikkei-225 fell 0.39%.

In Europe markets trade deeply lower, as Britain’s FTSE-100 fell 3.77%, France’s CAC-40 slashed 4.14% and Germany’s DAX dropped 4.19%. The Italian stock market, Borsa Italiana, was down 5.97%.

Crude oil futures dropped 4.72% at $50.86 per barrel and Brent crude plunged 5.47% at $55.30. Gold futures rose 2.15%.

The euro slipped 0.14% at $1.0832 while the pound sterling fell 0.28% at $1.2921. Korea's won currency dropped to six-month low.