NEW YORK (Reuters) - Stocks across the globe fell on Tuesday to their lowest since early December and the benchmark U.S. debt yield hit a record low on concerns about the economic hit of the spread of the novel coronavirus.

Military officers wearing face masks stand outside Duomo cathedral, closed by authorities due to a coronavirus outbreak, in Milan, Italy February 24, 2020. REUTERS/Flavio Lo Scalzo

The market selloff accelerated after the U.S. Centers for Disease Control and Prevention said Americans should begin to prepare for community spread of the new coronavirus.

Oil prices continued to fall while the yen strengthened against the dollar end euro, in signs that traders were in search of relatively safer assets.

The flu-like virus has now infected more than 80,000 people, 10 times more cases than the SARS coronavirus.

The World Health Organization, however, has said the epidemic in China, where the epidemic began in December, peaked between Jan. 23 and Feb. 2 and has been declining since.

On Wall Street, where stocks fell the most in two years on Monday, indexes shed over 2% at session lows.

“For the first time in a while we’re finally waking up to the fact that this issue could go on for a while and have a significant impact on Chinese and global economic growth and potentially the United States,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“When people react to it because they don’t travel or go to restaurants or go shopping, that’ll have an immediate impact on the economy. It depends how long it goes an how wide the spread,” he adding, advising that investors wait for at least two days of gains before buying stocks again.

The Dow Jones Industrial Average .DJI fell 628.83 points, or 2.25%, to 27,331.97, the S&P 500 .SPX lost 68.38 points, or 2.12%, to 3,157.51 and the Nasdaq Composite .IXIC dropped 177.87 points, or 1.93%, to 9,043.41.

The pan-European STOXX 600 index .STOXX lost 1.76% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.77%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.14% higher, while Japan's Nikkei .N225, catching up to the sell-off after a Monday holiday, lost 3.34%.

For a graphic on Global stocks' performance vs. reported coronavirus cases, click

BET ON RATE CUTS

The risks are such that bond markets are starting to bet central banks will have to ride to the rescue with new stimulus.

Futures for the Federal Reserve funds rate <0#FF:> have surged in the last few days to price in a 50-50 chance of a quarter-point rate cut as early as April. In all, they imply more than 50 basis points of reductions by year end.

The indication of falling U.S. rates hit the dollar against a basket of its peers.

“Signs of the USD being penalized for having a central bank with some capacity to cut rates raises the question of whether rate spreads are likely to become a key driver any time soon,” said Alan Ruskin, chief international strategist at Deutsche Bank.

The dollar index =USD fell 0.339%, with the euro EUR= up 0.19% to $1.0873.

The Japanese yen strengthened 0.64% versus the greenback at 110.04 per dollar.

Sterling GBP= was last trading at $1.3003, up 0.59% on the day.

The coronavirus death toll climbed to 11 in Italy on Monday and several European countries were dealing with their first infections, feeding worries about a pandemic.

The rush to bonds dragged yields on 10-year U.S. Treasury notes US10YT=RR to a record low of 1.316%. The U.S. benchmark last rose 18/32 in price to yield 1.3188%, from 1.377% late on Monday.

The 30-year bond US30YT=RR set a fresh record low at 1.79 and last rose 30/32 in price to yield 1.797%, from 1.836% late on Monday.

Gold ran into profit-taking after hitting a seven-year peak overnight, and last dropped 0.9% to $1,644.82 an ounce.

Oil prices continued to fall as demand concerns linked to the virus’ spread outweighed supply cuts.

U.S. crude CLc1 fell 2.51% to $50.14 per barrel and Brent LCOc1 was last at $55.14, down 2.06% on the day.