U.S. stocks sank, gold surged and Treasury yields tumbled as investors took a defensive stance amid renewed concern about the economic impact of the coronavirus as it spreads outside of China.
Tech companies were particularly hard hit, sending the Nasdaq 100 down almost 2%. The S&P 500 Index posted its first weekly decline since January. The yield on 30-year Treasuries fell to a record low amid data showing U.S. business activity shrank for the first time since 2013 as the virus hit supply chains.
Investors were put on alert this week by a spike in infections outside China and a slew of fresh warnings by companies over the potential impact the deadly respiratory virus may have on business. The growing concerns reignited appetite for assets seen as havens from the turmoil and reversed stock gains that had sent the S&P 500 Index to a record high Wednesday.
“Investors have suddenly got cold feet and are running for the exits,” said Chris Rupkey, chief financial economist for MUFG Union Bank. “Bond yields and stock prices are back in sync today as the plunging markets mean the economic outlook is not looking as good this year as many thought.”
The Stoxx Europe 600 Index slumped, with automakers among the worst performers, after equities in Korea and Hong Kong dropped more than 1%. Crude oil fell after hitting the highest in almost four weeks.
Elsewhere, the yen strengthened, recouping some if its biggest two-day decline since 2017. The dollar slumped after a four-day winning streak. The euro strengthened after data showed economic activity in the common-currency area sped up unexpectedly.
Here are some key events coming up:
Group of 20 finance ministers and central bank chiefs are due to meet Feb. 22-23 in Riyadh, Saudi Arabia, and are expected to discuss efforts to support growth amid the coronavirus threat.
These are the main moves in markets:
The S&P 500 Index dropped 1.1% at the close of trading in New York, leaving it down 1.3% this week.The Nasdaq 100 fell 1.9% Friday and 1.8% for the week.The Stoxx Europe 600 Index fell 0.5%.The MSCI Asia Pacific Index fell 0.5%.
The Bloomberg Dollar Spot Index fell 0.3%.The euro rose 0.6% to $1.0848.The British pound advanced 0.6% to $1.296.The Japanese yen strengthened 0.5% to 111.59 per dollar.
The yield on 10-year Treasuries declined five basis points to 1.47%.The yield on 30-year Treasuries fell five basis points to 1.91%Germany’s 10-year yield rose one basis point to -0.43%.Britain’s 10-year yield was little changed at 0.57%.
West Texas Intermediate crude sank 0.8% to $53.34 a barrel.Gold strengthened 1.5% to $1,644.38 an ounce.
–With assistance from Michael G. Wilson, Robert Brand, Constantine Courcoulas and Todd White.Toggle panel: Insert Script to <head>