Dow sinks 1,000 points on alarm over virus spreading in United States


By Medha Singh and Sanjana Shivdas

March 5 (Reuters) - Wall Street's losses deepened and the Dow Jones Industrials shed 1,000 points in afternoon trading on Thursday as death toll in the United States rose to 11 and travel related stocks took a severe beating.

Technology giants Alphabet Inc GOOGL.O, Inc AMZN.O, Facebook Inc FB.O and Microsoft Corp MSFT.O recommended their employees in Seattle work from home.

The state of California declared an emergency, a day after U.S. lawmakers approved an $8.3 billion bill to combat the outbreak.

Investors dumped stocks and rushed to the safe havens, boosting gold prices by 1.8% and pushing the yield on the benchmark 10-year U.S. Treasury to a record low. US/

"With bonds surging and yields at historic lows, concerns are we will get some kind of economic slowdown and it may be worse than initially factored in," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

As virus cripples travel demand, the International Air Transport Association flagged a potential $113 billion hit to global airline travel, sending the S&P 1500 Airlines Index .SPCOMAIR down 8.1%.

Carrier Southwest LUV.N issued a revenue warning, while United Airlines UAL.O and JetBlue Airways JBLU.O cut flights and implemented cost controls.

Cruise operators Carnival Corp CCL.N, Royal Caribbean Cruises RCL.N and Norwegian Cruise Line Holdings NCLH.N sunk between 14% and 17% as health officials screened people on a ship linked to a person's death in California.

The CBOE Volatility index .VIX, Wall Street's fear gauge, jumped 8.2 points to 40.14.

At 1:20 p.m. ET, the Dow Jones Industrial Average .DJI was down 1,018.93 points, or 3.76%, at 26,071.93, the S&P 500 .SPX was down 114.27 points, or 3.65%, at 3,015.85. The Nasdaq Composite .IXIC was down 284.86 points, or 3.16%, at 8,733.23.

All the major S&P sectors were in the red with a 5.3% fall in the interest-rate sensitive financials sector .SPSY weighing the most.

The benchmark index, which fell almost 12% last week, its worst since the 2008 financial crisis, had recovered some poise on Wednesday on Joe Biden's surge in the Democratic primaries.

The index, however, is still about 11% below its record close on Feb. 19.

The Labor Department's data showed weekly jobless claims fell last week, indicating resilience in the domestic economy. However, analysts remained skeptical about the future.

"If we are headed towards a recession or if you are seeing pressure on travel and tourism, I would expect the jobless claims to worsen over the next few weeks," said Mike Bailey, director of research at FBB Capital Partners in Bethesda, Maryland.

All eyes will now be on the crucial non-farm payrolls report on Friday.

Declining issues outnumbered advancers for a 6.23-to-1 ratio on the NYSE and for a 4.76-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and 71 new lows, while the Nasdaq recorded 24 new highs and 253 new lows.

(Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Patrick Graham and Arun Koyyur)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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