U.S. markets poised to extend losing streak as coronavirus grips global economy

All three indexes entered correction territory after the open, having fallen 10 percent from their recent highs. The Dow was down 650 points by late morning, or about 2.3 percent. The Standard & Poor's 500 and Nasdaq composite were down 2.3 and 2.8 percent, respectively.

As of late Thursday morning, the S&P 500 had suffered its worst percentage drop — 9.05 percent — in a calendar week since October 2008, said Howard Silverblatt of S&P Dow Jones Indices.

"At this point, if we closed here, it would be the worst Monday through Friday drop for the S&P 500 since the 18.20 percent decline in October 2008," Silverblatt said. "The current and largest concern now is if consumers start pulling back on their spending. Consumer spending has been supporting the economy."

Global markets also shuddered as the outbreak continues to spread beyond China. Japan's Nikkei was down more than 2 percent as many Japanese schools were closed through early April.

European stocks also entered correction territory on Thursday. The pan-European Stoxx 600 fell 4 percent. Britain's FTSE dropped 4.2 percent, as did and Germany's DAX. In Italy — the country with Europe's weakest economic growth in 2019 — Prime Minister Giuseppe Conte this week said the economic blow could be "very strong."

From an economic standpoint, much of the focus had been on coronavirus' repercussions for global supply chains, which rely heavily on manufacturing and production from Chinese factories. But now that public health officials are bracing for the outbreak to spread in the U.S., experts worry about an additional threat to the economy. Daily routines and consumer spending could grind to a halt if schools are closed, large gatherings are canceled and businesses close their doors.

Oil prices also continued to drop, and the yield on the benchmark 10-year Treasury note hit a new low, reflecting the anticipation that a slowdown is on the horizon.

The Wilshire 5000 has fallen five days in a row, the longest losing streak of 2020 and the longest string of negative days since September 24, 2019. The five-day loss of 2,792.16 points or 8.09 percent, represents a paper loss of approximately $2.9 trillion.

Goldman Sachs said in a note Thursday that the virus would slow economic activity across the planet. The financial services giant predicts no earnings growth this year and modest earnings growth in 2021.

"Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty," Goldman strategist David Kostin wrote in a note.

The outbreak has been met with inconsistent messaging from the Trump administration. President Trump is highly concerned about the stock market and is urging aides not to discuss the outbreak in ways that could rattle the economy further. Late Monday, top White House economic adviser Larry Kudlow said that investors should consider "buying these dips" in the market.

Still, analysts point to stark underperformance in oil, travel and leisure sectors, plus industries dependent on Chinese supply chains.

"If you're looking for something to worry about, take your eyes off the stock ticker tape and look instead at the bond and oil markets," said Ed Yardeni, president of Yardeni Research. "They continue to flash warning signals about the economy's strength. And stock investors might be well served by watching them to confirm that any rally has legs."

When the coronavirus outbreak first surfaced in the Chinese city of Wuhan, analysts initially sized up any potential hit to the global economy based on the 2002 SARS outbreak. But in the nearly 20 years since, the Chinese economy has become much more substantial and intertwined, triggering extreme uncertainty for economies and businesses worldwide.

"Every day we think we could be near a bottom, and every day we are not," Cowen analyst Helane Becker wrote in a note early Thursday. "Today, there were more reports of the virus showing up in places like Croatia, France, Germany, Austria, Greece and elsewhere. Borders are lines on a map. The virus has spread, and the question is how much do people change their travel plans."

Coronavirus's rapid spread continues to raise the specter of a global pandemic. South Korea announced 505 new cases on Thursday, bringing its total to 1,766, including a U.S. soldier stationed on the peninsula. Iran reported 245 confirmed cases and a death toll of 26. Religious pilgrimages in Saudi Arabia have been halted and Tokyo's plans to host the 2020 Olympics hang in the balance.

Even so, President Donald Trump struck an optimistic tone Wednesday evening during a White House news conference. Trump said the risk to America was "very low" and that the outbreak would swiftly be contained. Trump announced that Vice President Mike Pence will lead the administration's response to the outbreak.

"We've had tremendous success, tremendous success beyond what many people would've thought," Trump said. "We're very, very ready for this."

But immediately following Trump's comments, Health and Human Services Secretary Alex Azar and Centers for Disease Control and Prevention Principal Deputy Director Anne Schuchat warned Americans to prepare for the number of cases to grow.

"We can expect to see more cases in the United States," Azar said.

"We do expect more cases," Schuchat said.