Dow plunges 600 points as coronavirus fears cap turbulent week on Wall Street

Jessica Menton | USA TODAY

Show Caption Hide Caption Travelers from China express virus spread worries US Citizens returning from visiting family in China for the Lunar New Year holiday describe what it's like in the country right now and traveling during the ongoing coronavirus outbreak. (Jan. 30)

January threw stock investors a few curveballs.

They faced simmering tensions with Iran at the start of the month. Then the market's mood got a boost in mid-January following a partially resolved trade dispute with China.

But now a new fear looms: the outbreak of a coronavirus in China that has spread around the world.

The coronavirus has infected almost 10,000 people globally, and has prompted the World Health Organization to declare the outbreak a global health emergency.

The latest developments sent stocks tumbling Friday. The Dow Jones industrial average plunged 603.41 points, wiping out its gains for the year.

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The broad losses hit hitting everything from airlines to resort operators to technology companies, with stocks recording their worst January since 2016.

Investors flocked to safe-haven corners of the market, a sign they're unsure how the potential global economic fallout from the virus could play out, analysts say.

A widely watched recession predictor raised worries. The yield on the 10-year Treasury note fell below the yield of the three-month bill recently. The phenomenon, known as an inverted yield curve, is often a harbinger of an economic slowdown.

The yield on the 10-year Treasury fell to 1.51% from 1.55% late Thursday.

“Investors, companies and governments have taken a cautious stance around this virus,” says Charlie Ripley, senior investment strategist at Allianz Investment Management. “Investors are watching to see whether this becomes a larger pandemic.”

Friday’s losses also erased the Standard & Poor’s 500 gains for 2020. The index skidded 1.8% Friday, putting it 0.2% lower for the month.

Coronavirus cases have spiked in China, along with deaths there, and the U.S. is now advising against all travel to the world’s second-largest economy. The move weighed on airline and energy stocks. It also helped push oil prices lower.

On Friday, American Airlines fell 3.1% and Delta Air Lines slipped 2.4% after both companies suspended flights to and from China.

Technology stocks led the losses. Apple, which relies on Chinese consumers for sales and factories for supplies, fell 4.4%. Nvidia slid 3.8% and other chipmakers slipped.

Alex Veiga from The Associated Press contributed to this article.