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Global Stocks Continue to Slide on Coronavirus Concerns

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The virus, which has now spread to 47 countries, has put pressure on businesses and supply chains around the world.

A global stock market meltdown entered its sixth day on Thursday, a decline that has reflected rising fear over the fast spreading coronavirus and pulled major benchmarks to near four-month lows.

Thursday’s selling came after public health officials in the United States and Germany said new patients in each country had no known connection to others with the illness, a development that could complicate efforts to track the virus. Cases of the virus have appeared in at least 47 countries.

The speed of the market turndown — the S&P 500 was at record highs just a week ago — has been stunning. Trading was volatile, and the index was down about 1.5 percent by midday on Thursday. It is close to 10 percent below a high reached on Feb. 19, a drop known as a correction in financial markets.

The last time stocks fell that much was late 2018, when investors worried that the trade war and rising interest rates might tip the U.S. economy into a recession. This recent decline has put the blue-chip benchmark on pace for its worst weekly performance since the 2008 financial crisis.

Shares in Europe and Asia were similarly hard hit on Thursday, and the collapse in investor confidence spread far beyond stocks. Crude oil fell more than 4 percent, as investors weighed the chance of growing economic paralysis related to travel restrictions, factory shutdowns and other measures to stop the outbreak.

Bond markets broadcast deep pessimism about the economy, as money flooded into Treasury markets, pushing prices sharply higher, and yields — which move in the opposite direction — to once unthinkable depths.

  • Updated Feb. 26, 2020

    • What is a coronavirus?

      It is a novel virus named for the crownlike spikes that protrude from its surface. The coronavirus can infect both animals and people and can cause a range of respiratory illnesses from the common cold to more dangerous conditions like Severe Acute Respiratory Syndrome, or SARS.
    • How worried should I be?

      New outbreaks in Asia, Europe and the Middle East are renewing fears of a global pandemic. The Centers for Disease Control and Prevention warned this week that Americans should brace for the likelihood that the virus will spread to the United States.
    • How do I keep myself and others safe?

      Washing your hands frequently is the most important thing you can do, along with staying at home when you’re sick.
    • What if I’m traveling?

      The C.D.C. has warned older and at-risk travelers to avoid Japan, Italy and Iran. The agency also has advised against all nonessential travel to South Korea and China.
    • How can I prepare for a possible outbreak?

      Keep a 30-day supply of essential medicines. Get a flu shot. Have essential household items on hand. Have a support system in place for eldery family members.
    • Where has the virus spread?

      The virus, which originated in Wuhan, China, has sickened more than 80,000 people in at least 33 countries, including Italy, Iran and South Korea.
    • How contagious is the virus?

      According to preliminary research, it seems moderately infectious, similar to SARS, and is probably transmitted through sneezes, coughs and contaminated surfaces. Scientists have estimated that each infected person could spread it to somewhere between 1.5 and 3.5 people without effective containment measures.
    • Who is working to contain the virus?

      World Health Organization officials have been working with officials in China, where growth has slowed. But this week, as confirmed cases spiked on two continents, experts warned that the world was not ready for a major outbreak.

The yield on the 10-year Treasury note touched 1.25 percent in morning trading. Prices for junk bonds, and even safer corporate debt, fell.

“Stocks and bonds say we’re doomed,” wrote Chris Rupkey, chief financial economist at MUFG Union Bank, in a research note on Thursday. “Anyone who has a better idea for what lies ahead please let us know because right now the direction ahead for the economy is straight down.”

On Thursday, analysts at Goldman Sachs predicted that companies in the S&P 500 would generate no profit growth as a result of the crisis, because of a “severe decline in Chinese economic activity,” disruption in the supply chain for American companies and a slowdown in the United States economy.

Microsoft were down nearly 3 percent after the company said on Wednesday that its sales in the current quarter would be lower because of a disruption to its supply chain. Anheuser-Busch InBev on Thursday forecast a steep drop in quarterly profit. Its shares fell 8 percent.

Companies have also scaled back travel. The French cosmetics giant L’Oreal suspended all business travel for its 80,000 employees until the end of March. Nestlé, the giant Swiss-based food company, said it would suspend all international business trips for its 290,000 workers until mid-March.

In Europe, the FTSE 100 in Britain, the CAC 40 in France and the DAX in Germany were all more than 3 percent lower on Thursday. Asian markets closed the day largely down, though shares in China bucked the general trend, with Shanghai rising 0.1 percent.

Kevin Granville and Katie Robertson contributed reporting.

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