Wall Street's Brutal Week Slashed Nearly 3,600 Points From Dow

Enlarge this image toggle caption Johannes Eisele/AFP via Getty Images Johannes Eisele/AFP via Getty Images

Updated at 5:40 p.m. ET

Stocks took another steep dive Friday, deepening a multi-day rout fueled by fears about the coronavirus' impact on the global economy.

The Dow Jones Industrial Average fell 357 points on Friday, capping a week in which the blue chip index fell 3,583 points or 12.4%. The Dow is down 16.3% from its recent peak on Feb. 12.

The S&P 500 stock index lost 11.5% for the week and is now down 14.6% from the all-time high it reached only last week.

The Nasdaq inched into positive territory in the closing minutes of trading Friday, but is still down 10.5% for the week and 14.6% below its record high last Wednesday.

The drop in stocks this week has come with stunning speed, as investors grapple with evidence that the deadly coronavirus epidemic is spreading beyond China to other countries, including Italy, South Korea and Iran.

"It's unprecedented, really. And certainly in my career, and even if you go back 70 years, we've never had a correction--that is a 10% pullback from a high--develop so quickly," said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute.

Federal Reserve Chairman Jerome Powell sought to calm jittery investors, with reassurance that the central bank is prepared to cut rates if necessary.

Enlarge this image toggle caption Tomohiro Ohsumi/Getty Images Tomohiro Ohsumi/Getty Images

"The fundamentals of the U.S. economy remain strong," Powell said in a rare, written statement. "However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."

The Trump Administration argued that the plummet in stock prices was unlikely to affect the broader economy.

Larry Kudlow, director of the National Economic Council, called the downturn a "short-term market plunge" and said, "I don't think at this point it's going to have much of an impact."

Kudlow said he had spoken to corporate CEOs and had not heard of serious supply-chain problems.

But investors appear anxious anyway, and the interest rate on U.S. government debt, which usually falls in turbulent times, lost more ground. The 10-year Treasury bill dipped to a record low of 1.15%.

"Uncertainty regarding something as serious as this has a tendency to induce the kind of fear that in in the market's view is 'sell [first] and ask questions later,'" said Quincy Krosby, chief market strategist at Prudential Financial.

With the S&P 500 index down 14.6%, the market is officially in what Wall Street calls a market correction when stocks are at least 10% below a recent high.

All three major stock indexes posted their largest ever point drops on Thursday.

Companies around the world are cutting production and canceling conferences to limit the outbreak's spread. JPMorgan Chase announced it is eliminating nonessential employee travel, while United Airlines said today it is reducing flights to Japan, Singapore and South Korea.

As businesses slow down, economists say the odds of a global recession have increased significantly.

"With the coronavirus pandemic spreading throughout the world, falling corporate sales and its economic impact will depress economic growth," wrote Sung Won Sohn, professor of economics at Loyola Marymount University.