US markets continue downslide

Fear of the coronavirus continued to slash US equity markets Friday, with all indexes down in early trading.

So far this week losses have wiped out about $3.4 trillion in value and sett stocks up for the biggest weekly losses since 2008 if the downdraft continues.

The Dow Jones Industrial Average fell 3.62 percent, or 906.24 points, to 24,882.24 in early trading. The blue-chip index had been down as much as 1,000 points. The S&P 500 fell 94 points or 3.62 percent. Nasdaq fell 216.66, or 2.54 percent.

Investors fear the global spread of the coronavirus will disrupt supply chains, cut production and depress sales. This would reduce company earnings and make current stock prices too expensive for many investors.

Futures were down prior to Friday's market open, suggesting investors don't see a quick rebound. On Thursday, the Dow Jones Industrial Average plunged 1,190.95 points, creating the largest percentage drop in US markets since August 2011.

Exxon Mobil, Chevron, Wells Fargo and Boeing were among the 695 stock hitting new lows in Thursday's trading. Only 309 stocks advanced while 2,685 fell and 52 remained unchanged.

Thursday's winners included Allied Healthcare Products, a maker of respiratory therapy equipment and home healthcare products; Co-Diagnostics, a maker of products and a provider of services for testing and research; and Vir Biotechnology, a maker of products designed to stimulate or improve the immune system.

Bond and commodity prices also fell Thursday and earlier in the week. There is no indication of a rebound in early trading Friday.

Investors sought safety in government bonds and sent the 10-year US Treasury yields to all-time lows. In early trading Thursday, yields briefly fell below 1.2 percent. On Friday, the yield was 1.176 percent.

Oil, a proxy for the overall strength of the economy because transportation is key to supply chains, manufacturing, distribution and sales, is headed for its worst performance in four years.

Brent crude, a worldwide benchmark, briefly fell below $50 a barrel for the first time in 2.5 years, but closed Thursday at $50.37. In early trading Friday, it fell $1.87 to $49.86.

There is some chatter that the US Federal Reserve will cut interest rates to stimulate the economy when it meets March 17-18. In 2019, the Fed cut rates three times by a quarter point each to 1.50 – 1.75 percent. Lower rates reduce the cost of commercial borrowing and consumer debt. The action would be intended to encourage investment and spending.

The Fed doesn't discuss possible action prior to meeting.