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The stock rout continued on Tuesday as diving bond yields raised more concern that the global economy is slowing significantly because of the spreading coronavirus. The 10-year Treasury yield hit a record low as the Dow Jones Industrial Average added to Monday’s 1,000-point drop.
The Dow Jones Industrials submerged 879.44 points, or 3.2%, to end a disastrous Tuesday at 27,081.36. The 30-stock index notched its worst two-session stretch since February 2018 and posted back-to-back losses of at least 800 points for the first time ever.
The S&P 500 fell 97.68 points, or 3%, to 3,128.21.
The NASDAQ cratered 255.67 points, or 2.8%, to 8,965.61.
These declines also put the Dow and S&P 500 more than 7.8% below the record highs reached earlier this month. The Nasdaq closed 8.9% below its all-time high from Feb. 19. Technology stocks such Apple and Facebook have fallen into correction territory, down more than 10% from all-time highs hit just last month.
The drop in yields pushed bank stocks lower. Bank of America fell more than 5% while JPMorgan Chase closed 4.5% lower. Citigroup and Wells Fargo declined by 4.3% and 2.7%, respectively. Lower rates could hit bank profit margins.
Investors fled stocks on Monday as a surge in coronavirus cases outside of China intensified fears of a prolonged global economic slowdown.
South Korea raised its coronavirus alert to the “highest level,” with the latest spike in numbers bringing the total infected to more than 800. Meanwhile, Italy has been the worst affected country outside of Asia, with more than 130 reported cases and seven deaths. Iran also confirmed 12 deaths.
U.S. equities dropped as Centers for Disease Control and Prevention (CDC) officials briefed the U.S. on how to get ready if the coronavirus outbreak worsens domestically.
Mastercard warned about the potential impact the coronavirus will have on 2020 results, sending their shares down more than 6%.
Analysts have already begun cutting their earnings estimates for the first quarter. Data compiled by The Earnings Scout showed analysts expect S&P 500 earnings to contract by about 0.1% this quarter. Earlier this month, analysts expected growth of roughly 2.5%
Prices for the 10-Year U.S. Treasury gained, lowering yields to 1.34% from Monday’s 1.37%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.60 to $49.83 U.S. a barrel.
Gold prices dumped $38.70 to $1,637.90 U.S. an ounce.
