U.S. stocks plunge as traders fear coronavirus will cause deep recession

U.S. stocks plunge as traders fear coronavirus will cause deep recession

Despite opening gains and optimism, stocks on the US markets ended the week on a down note, with the Dow Jones Industrial Average losing almost 1,000 points in the final minutes of trading.

President Donald Trump called on USA health regulators to expedite potential therapies aimed at treating COVID-19, the respiratory disease caused by the virus, and the White House sounded upbeat on the chances of passage of hundreds of billions of dollars of aid in Congress.

The Dow was down more than 17 percent for the week, its biggest weekly decrease since October 2008, when it dropped 18.2 percent.

While the S&P 500 added 94 billion US dollars in market capitalization on Thursday, it is down 8.09 trillion USA dollars since its February 19 record close, according to S&P Dow Jones Indices' analyst Howard Silverblatt.

Coronavirus fears have wiped off nearly 32 percent, or about US$9 trillion, from the value of the benchmark S&P index since its record closing high on February 19.

Governors in NY and California have ordered all nonessential employees to work from home, and a similar order for IL is set to take effect Saturday.

The moves by two of the most populous U.S. states affects some 40 million people.

Also, federal authorities this week moved to close the borders with Canada and Mexico, with more than 12,000 cases having been confirmed in the U.S. as of Friday.

Most Americans would get direct payments under the Senate's current Phase III stimulus proposal, worth about $1 trillion, though individuals and families making above a certain amount of income would receive nothing.

USA equities ended lower in wild trading on Friday as fears of economic slowdown driven by the coronavirus outbreak continued to grip investors.

The Dow Jones Industrial Average erased an early gain of 444 points and was little changed at midday. Investors were hoping that was the bottom and that the stock market can recover as virus cases peak in the coming months and government stimulus kicks in. "It's nearly like we're going to continue to be in these volatile swings until we get a little more clarity on how large that plan is", said Ryan Detrick, senior market strategist at LPL Financial Holdings Inc in Charlotte, North Carolina.

Fears over the severity of the outbreak have wiped off almost 30% - or more than US$8 trillion - from the value of the benchmark S&P index since its record closing high on Feb 19, as the rapid spread of COVID-19 shuts down large cities and upends business activity. The wild swings continued Friday on a day called "quadruple witching", when stock futures and options expire. The S&P 500 lost more than 13% week to date after dropping another 11.5% last week.

Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favoured decliners.

The S&P 500, which drives movements for most 401 (k) accounts more than other indexes, is down roughly 29 per cent since its record exactly a month ago and close to its lowest point since late 2018.

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