Thursday's Stock Market Close: US Equities Drop, Dow Plunges 970 Points, On Intensifying Virus Worries

U.S. stocks plummeted on Thursday, erasing most of Wednesday’s gains, as investors wondered how klong the coronavirus will last and how much it will hurt the global economy.

The Dow Jones Industrial Average dropped 969.58 points to 26,121.28 while the S&P 500 plunged 106.18 points to 3,023.94 and the Nasdaq Composite Index tumbled 279.49 points to 8,738.60.

Volume on the New York Stock Exchange totaled 4.53 billion shares with 309 issues advancing, 35 setting new highs, and 2,695 declining, with 387 setting new lows.

Active movers were led by Inovio Pharmaceuticals Inc. (INO), Bank of America Corp. (BAC) and General Electric Co. (GE).

The World Health Organization reported more than 95,200 confirmed cases of coronavirus around the world, with more than 3,270 deaths.

Iran, which has closed schools and universities until March 20, confirmed 3,513 cases and 107 deaths. South Korea now has more than 6,000 infections. China’s finance ministries have allocated $16 billion for virus prevention and control.

California declared a state of emergency due to the virus.

The International Air Transport Association said the global air transport industry could lose up to $113 billion from the impact of coronavirus.

“The majority of this [decline] is just growing concern about the fallout from the virus because it’s spreading,” said Tom Essaye, founder of the Sevens Report. “For every hour, another group of people have it and it’s in another state. People are getting a bit nervous about this constant barrage of headlines.”

“The optimism coming off Super Tuesday has come and gone and we reverted to being driven by fear over the containment of the virus and the impact it’s going to have on the global economy down the road,” said Mike Loewengart, managing director of investment strategy at E-Trade.

“Despite the rally in stocks [Wednesday], Treasury yields and gold prices did not respond in-kind,” said Matt Maley, chief market strategist at Miller Tabak. “None of the other markets saw the kinds of moves yesterday that would indicate that we’re out of the woods on the negative impact of the coronavirus. In other words, many other markets are still sending up warning signals.”

Sen. Elizabeth Warren dropped out of the 2020 presidential race.

In the U.S., Initial jobless claims fell by 3,000 to 216,000 for the week ended Feb. 29.

The U.S. Bureau of Labor Statistics said on Thursday that unit labor costs rose 0.9% in the fourth quarter following an 1.4% increase in the third quarter. Nonfarm productivity rose 1.2% in the fourth quarter.

The Commerce Department said on Thursday that factory goods orders decreased by 0.5% in January as an increase in demand for machinery was offset by a decline in demand for transportation equipment.

Overnight in Asia, markets finished higher as local government’s approved emergency spending. China’s Shanghai Composite gained 1.99%, while Hong Kong’s Hang Seng jumped 2.08%, and Japan’s Nikkei-225 rose 1.09%.

In Europe markets finished lower as Britain’s FTSE-100 plunged 1.62%, France’s CAC-40 swooned 1.90% and Germany’s DAX tumbled 1.51%.

Crude oil futures dropped 1.92% at $45.88 per barrel and Brent crude slipped 0.14% at $49.92. Gold futures gained 1.92%.

The euro rose 0.84% at $1.1229 while the pound sterling gained 0.7% at $1.2963.

The yield on the 10-year Treasury plunged 6.65% to 0.926% while yield on the 30-year Treasury dropped 3.91% to 1.571%.