US stocks sold off sharply on Thursday, with shares of travel companies pummelled, as large swings in the market continued amid uncertainty over the spread of the coronavirus and its economic fallout.
The major indexes were down over 3 per cent a day after they tallied huge gains following moderate Joe Biden’s success in the Super Tuesday primaries for the Democratic presidential nomination.
Declines resumed along with continued volatility as investors grappled with the ultimate economic impact from the coronavirus, which has led to more than 3,300 deaths worldwide.
In the latest developments, Alphabet Inc’s Google joined other big tech firms in recommending employees in the Seattle area to work from home, while new cases arose around New York and Los Angeles.
“There’s no way to put a framework around this, there’s no way to model it, because you just don’t know,” Carol Schleif, deputy chief investment officer, at Abbot Downing in Minneapolis.
“The market is clearly trading on emotion today and not fundamentals because they can’t peg where the fundamentals are,” Schleif said.
The Dow Jones Industrial Average fell 1,010.46 points, or 3.73 per cent, to 26,080.4, the S&P 500 lost 114.57 points, or 3.66 per cent, to 3,015.55 and the Nasdaq Composite dropped 288.07 points, or 3.19 per cent, to 8,730.02.
The benchmark S&P 500 was last down over 10 per cent from its Feb. 19 closing high.
The financial sector dropped 5.3 per cent as the continued fall in Treasury yields weighed on rate-sensitive bank shares, with the yield on the 10-year Treasury note falling to 0.92 per cent. Defensive sectors, such as utilities and consumer staples, were down less than the overall market.
The CBOE Volatility index, Wall Street’s fear gauge, jumped 8.63 points to 40.62.
Shares of companies in the travel and leisure industry were punished, with the S&P 500 airline index off 7.1 per cent, including a 10.3 per cent fall for American Airlines Group Inc.
The coronavirus epidemic could rob passenger airlines of up to $113 billion in revenue this year, an industry body warned.
Shares of cruise operators tumbled after the Grand Princess ocean liner, owned by Carnival Corp, was barred from returning to its home port of San Francisco on coronavirus fears after at least 20 people aboard fell ill. Carnival shares dropped 13.7 per cent, while Royal Caribbean Cruises fell 15.5 per cent.
Data showed that the number of Americans filing for unemployment benefits fell last week, suggesting the labour market was on solid footing despite the coronavirus outbreak, with investors casting an eye toward Friday’s US employment report for February.
Declining issues outnumbered advancing ones on the NYSE by a 6.38-to-1 ratio; on Nasdaq, a 4.96-to-1 ratio favoured decliners.
The S&P 500 posted 8 new 52-week highs and 73 new lows; the Nasdaq Composite recorded 25 new highs and 282 new lows.