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The Dow Jones Industrial Average fell on Wednesday, extending its sharp weekly decline, as the 10-year Treasury yield traded at a record low amid concerns over the coronavirus spreading even further.
The 30-stock Dow closed 123.77 points lower, or 0.5%, at 26,957.59. The Dow rose as much as 461.42 points, or 1.7%, earlier in the session. The S&P 500 fell 0.4% to 3,116.39 after rallying more than 1% to start off Wednesday’s session. The Nasdaq Composite was up just 0.2% at 8,980.77 after rising as much as 2%.
Wednesday’s losses brought the Dow’s points losses to more than 2,000.
Disney was the worst-performing Dow stock, trading more than 3% lower after Bob Iger stepped down from his role as CEO. Exxon Mobil and Chevron fell more than 2% each, adding to the Dow’s losses. Energy, utilities and real estate were dragged the S&P 500 lower. Energy dropped nearly 3% while utilities and real estate both dipped more than 0.8%.
Traders appeared to be buying and selling stocks in volatile fashion after each new report concerning the virulent coronavirus, its spread outside China and its potential impact on global growth. The speed of the moves hinted that it could be computer trading driving the action.
The 10-year Treasury yield slid to 1.3% — hitting an all-time low — after hovering around 1.36% earlier in the day. The earlier bounce in yields eased concerns slightly that the coronavirus would tip the globe into a recession.
Bond yields fell Wednesday after Bloomberg News cited a Food and Drug Administration official saying the coronavirus was on the cusp of a pandemic.
“Unfortunately, I think this is going to turn into a full-blown correction,” David Bianco, chief investment strategist for the Americas at DWS, told CNBC’s “Squawk Box.” “It’s a material impact to our earnings outlook and it’s probably going to be another year of flatish earnings growth.”
The news overnight was not positive in terms of containing the spread of the coronavirus. South Korea reported 169 new cases, bringing the country’s total to 1,146 infected. In Italy, infections now total 325 and cases are now being seen beyond the original epicenter in the north. China reported 406 new confirmed cases, and an additional 52 deaths.
President Donald Trump will hold a news conference at 6 p.m. to address the coronavirus, he tweeted.
“The sensitivity to what we don’t know has really been revealed,” said Jeff Kilburg, CEO of KKM Financial. “These last couple of sessions have really brought out to the surface the potential worst-case scenarios that the virus can spread from continent to continent.”
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