By Rodrigo Campos
NEW YORK (Reuters) – The Dow industrials posted the largest-ever points drop on Thursday as Wall Street led stocks across the globe lower, with traders fretting over the economic impact of the spreading coronavirus.
Oil prices tumbled to their lowest in over a year and the benchmark U.S. Treasury yield set a record low.
No country should make the “fatal mistake” of assuming it will be spared the coronavirus, the World Health Organization said, as governments from Iran to Australia shut schools, canceled big events and stocked up on medical supplies in a race to contain the rapid global spread.
On Wall Street, the S&P 500 posted its largest percentage drop since August 2011 as rising numbers of new infections outside China raised fears of a pandemic with unknown economic implications.
“The path of this scourge is unknown therefore you can’t know the economic impact. You can roll the dice but it’s a guess,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
The Dow Jones Industrial Average fell 1,190.95 points, or 4.42%, to 25,766.64, the S&P 500 lost 137.63 points, or 4.42%, to 2,978.76 and the Nasdaq Composite dropped 414.30 points, or 4.61%, to 8,566.48.
The near 1,200 point drop for the Dow was its largest ever for a single session.
The pan-European STOXX 600 index lost 3.75%, for a more than 10% drop from its record closing high set last week.
MSCI’s gauge of stocks across the globe shed 3.32%. Emerging market stocks lost 1.21%. Japan’s Nikkei futures lost 4.34%.
(GRAPHIC: Daily market value loss – https://fingfx.thomsonreuters.com/gfx/buzzifr/15/7815/7815/Pasted%20Image.jpg)
The benchmark U.S. Treasury yield touched a record low below 1.25%.
U.S. 10-year notes last rose 11/32 in price to yield 1.2739%, from 1.31% late on Wednesday. The 30-year bond last rose 20/32 in price to yield 1.7714%, from 1.798%.
The dollar fell as investors bet that the Fed would cut interest rates to offset the impact of the spreading coronavirus. With U.S. rates relatively high, and the scope for them to fall much wider, investors are selling the greenback.
“Rate cut expectations have gained momentum and U.S. rate expectations are falling a lot more than they are in the euro zone,” said Thu Lan Nguyen, an analyst at Commerzbank.
The dollar index fell 0.685%, the most in over a year, with the euro up 1.06% to $1.0997. Sterling was last trading at $1.2888, down 0.12% on the day.
The Japanese yen strengthened 0.66% versus the greenback at 109.70 per dollar.
Gold ended little changed after hitting a fresh 7-year high earlier.
Oil prices plunged on fears of a pandemic that could slow the global economy and dent demand for crude.
U.S. crude fell 5.03% to $46.28 per barrel and Brent was last at $51.36, down 3.87% on the day.
(Reporting by Rodrigo Campos, additional reporting by Kate Duguid and Sinéad Carew in New York and Ross Kerber in Boston; Editing by Will Dunham, Nick Zieminski, Richard Chang and Cynthia Osterman)