US stocks ended a rocky week on a down note as the coronavirus continues to strike fear on Wall Street.
The Dow Jones industrial average fell as much as 819.53 points, or 3.1 percent, in early trading despite a US Department of Labor report showing the American economy added 273,000 jobs last month, far outpacing expectations.
The blue chip index pared back some of those losses after White House economic adviser Larry Kudlow (insert) said the Trump administration is considering a “targeted” stimulus program for businesses hit hardest by the outbreak.
“We’re looking at things like people who may be stranded at home and will lose pay — we want to help them,” Kudlow said. “Small businesses in certain areas, the geographical areas or certain sectors, we may wish to help them with some cash flow.”
Kudlow’s comments helped boost airline stocks, with Alaska Airlines up 4 percent to $45.21 and Delta up 1.9 percent to $45.90.
But the remarks weren’t enough to push the broader market into the green as investors continue to fret over the economic impact of the virus, which has led big companies to cancel business events like Google’s annual conference for app developers. The virus has also severely crimped manufacturing in China, where products like Apple’s iPhone are made.
The epidemic has killed more than 3,400 people around the world as of Friday, most of which were in China. The number of US cases has grown to 270 with 14 deaths — up from zero deaths just last week.
The Dow ended the day down 256.50 points, or 0.9 percent, to 25,864.78. The S&P 500 fell 1.7 percent to 2,972.37, while the Nasdaq index dropped 1.8 percent to 8,575.62.
The strong jobs data also failed to lift spirits as traders fretted over what’s to come. Friday’s strong jobs report shows “the country’s immune system, if you will, going into the coronavirus fear is in excellent condition,” explained Quincy Krosby, chief market strategist for Prudential Financial. “The question for investors is, does this data matter, or is it going to deteriorate if — and that’s a big if — this shuts down the economy, shuts down consumer spending, and … we begin to see layoffs.”
Worried investors flooded the bond market, which is considered a safe haven. The yield on the benchmark 10-year US Treasury note dropped below 0.786 percent Friday, continuing a record-breaking decline this week. Yields move inversely to prices for bonds.
Investors are also concerned about the drop in bond yields that started before the coronavirus crisis, but accelerated as the virus has spread, said Jim Paulsen, chief investment strategist at the Leuthold Group. “I think it’s a huge fear generator and maybe before we finally bottom this market out, it really might have more to do with bottoming bond yields out than anything else,” he said.
