Stocks tumble, bonds surge on coronavirus fears
U.S. stocks tumbled as volatility sparked by the spread of the coronavirus woes continued to grip financial markets. Treasury yields sank to record lows as haven assets surged.
The S&P 500 fell more than 3%, erasing the majority of Wednesday's steep gains, as wild swings piled up. The benchmark has had the most volatile week since S&P Global Ratings cut the U.S. debt rating in 2011. Banks and tech shares led losses.
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Investor confidence has been shaken as cases of the virus continue to multiply across the U.S. despite efforts by authorities to contain the outbreak. The 10-year yield sank to 0.90%, while the dollar plunged against the yen. Gold climbed and oil slid.
The S&P 500 has swung more than 3% five times in eight sessions
"If you think about what market volatility means, it's lots of people moving at the same time. When you have a 4.5% up day and a 2% down day -- what does that mean?" Kathryn Kaminski, chief research strategist at AlphaSimplex Group, said on Bloomberg Television. "It means we don't know what's going on."
Risk assets have whipsawed this week, with traders still on edge amid a rise in virus cases around the world and governments extending quarantines and travel restrictions. An industry association warned the outbreak could cost airlines as much as $113 billion in lost revenue. The S&P 500 has rebounded since the Federal Reserve pledged action on Friday, but it remains more than 10% below last month's all-time high.
In Asia, the main equities benchmark headed for a fourth straight gain. Surging Chinese stocks have now erased the last of their declines triggered by the outbreak.
These are the main moves in markets:
Stocks:
— The S&P 500 Index dropped 3.3% as of 1:45 p.m. New York time.
— The Stoxx Europe 600 Index fell 1.4%.
— The MSCI Asia Pacific Index gained 1.3%.
Currencies:
— The Bloomberg Dollar Spot Index declined 0.2%.
— The euro climbed 0.4% to $1.1179.
— The British pound gained 0.4% to $1.2927.
— The Japanese yen strengthened 0.7% to 106.78 per dollar.
Bonds:
— The yield on 10-year Treasuries sank 15 basis points to 0.90%.
— The yield on two-year Treasuries decreased 13 basis points to 0.57%.
— Germany's 10-year yield fell three basis points at -0.67%.
Commodities:
— West Texas Intermediate crude fell 1.5% at $46.07 a barrel.
— Gold strengthened 1.6% to $1,669.00 an ounce.
