Categories: Finance

Dow loses 3,200 points and counting on week, bond yields collapsing

Traders work on the floor of the New York stock Exchange (NYSE) on on February 24, 2020 in New York City. Stocks fell over 1000 points on Monday as global concerns grow about the economic impact of the Coronavirus.

Spencer Platt

This is a live blog. Check back for updates.

8:40 am: 2-year Treasury yield plunges below 1%

The 2-year rate Treasury yield slid 11 basis points to 0.95%, its lowest level since Nov. 2016. The benchmark 10-year rate also plunged to a fresh record low of 1.16% on Friday as investors dumped riskier assets and searched for safer options amid the coronavirus outbreak. The 10-year yield has tumbled 25 basis points this week alone. —Li

8:11 am: Wall Street’s ‘fear gauge’ spikes to fresh 2-year high

The Cboe Volatility Index (Vix), which is referred to by market experts as Wall Street’s “fear gauge,” hit a high of 47.15 on Friday. That’s its highest level since February 2018, when it briefly traded above 50. —Imbert

7:58 am: Barclays cuts S&P 500 2020 target, sees an earnings decline due to coronavirus

Barclays slashed its S&P 500 target for 2020 to 3,000 from 3,300 as the coronavirus throws the global supply chains into chaos. The equity benchmark tumbled more than 10% this week alone to 2,978 as of Thursday’s close. Barclays also cut its S&P 500 earnings estimates to $162 per share this year, representing a 2% drop in profits. “The repercussions of the shock to the Chinese economy that has already happened to the rest of the world will not be insignificant,” Maneesh Deshpande, head of equity derivatives strategy at Barclays, said in a note Friday. “We think it is too early to buy the dip since the repercussions from COVID-19 are likely to very bad or mildly bad.” —Li

7:55 am: Warsh rebuts charge that he’s looking to be Fed chair

Former Fed Governor Kevin Warsh denied accusations that he’s angling to be the central bank’s next chairman. Warsh caught the market’s attention Thursday with a Wall Street Journal op-ed urging his former colleagues to cut interest rates in response to the coronavirus outbreak. Another former Fed official, Richard Fisher, who was president of the Dallas district, told CNBC in an interview Thursday that there was “an audience of one” for the op-ed, namely President Donald Trump. Warsh, who was in office during the financial crisis, said, “For those of us that were in the middle of the last one of these wars, none of us covets being in Jay Powell’s seat today. We still have scar tissue from it.” He called Fisher’s comments “divisive rhetoric.” – Cox

7:48 am: Citi sees things improving for Apple in China

The coronavirus continues to cause fear in the markets but Citi said on Friday that the situation is China is getting better for the tech giant. “Overall, we believe that things are beginning to improve in China for Apple,” analyst Jim Suva said noting that the company’s stores were beginning to re-open. “Outside of Apple’s supply chain, we have heard comments from PC makers, who are talking about transitory impacts on the production/supply chain, while anticipated demand (outside of China) remains in line with expectations,” he said. Shares of Apple are down nearly 2% in premarket trading on Friday.  – Bloom

7:36 am: Global stocks lose $6 trillion in value in 6 days

Global stocks markets have lost $6 trillion in value over the past six days, according to S&P Dow Jones Indices. Stock markets around the world are plunging into correction territory as investors fear the surging of coronavirus cases outside of China will escalate the deadly virus to a pandemic. The market sell-off also wiped about $4 trillion from U.S. stocks in the same period, according to the firm’s Senior Index Analyst Howard Silverblatt.

“The current, and largest concern now is if consumer’s start pulling back on their spending – consumer spending has been supporting the economy, as it makes up for disappointing corporate expenditures,” Silverblatt wrote in an email to CNBC. – Fitzgerald

7:24 am: Former Fed Governor Warsh says Fed should work with counterparts to ease market fears

Former Fed Governor Kevin Warsh told CNBC on Friday that the U.S. central bank should work with its partners around the globe in a coordinated effort to ease financial markets. Warsh, who spoke on “Squawk Box” ahead of the week’s final day of trading, compared the Fed’s ability to cut interest rates to having a knife in a global “gunfight.”

“I think it’s likely to be a gunfight out there. When I look at the world’s big central banks, not a lot of them have guns. Maybe the Fed has a bigger gun than everyone else, but the Fed probably has a knife,” he said. “They’ve got a knife, there’s a gunfight, [so] you might as well find some friends that also have knives and see if you can’t do it together. And there’s some knives out there at the other big central banks.” — Franck

7:16 am: Futures bounce off worst levels as Warsh predicts global coordinated action

Dow futures are off their worst levels of the morning and now down just 225 points after Former Federal Reserve Governor Kevin Warsh said on CNBC that he expects the Federal Reserve and other central banks around the world to act soon in response to the coronavirus outbreak. –Melloy

6:53 am: Seeing indiscriminate selling in the premarket

We’re seeing a really active premarket already. Normally at this time of the morning, there are a handful of S&P 500 stocks trading. Right now, there are 334 S&P 500 stocks trading in the premarket, according to FactSet, and 326 of those are lower. Coronavirus related names like MGM Resorts are among the hardest hit. MGM is down 4% in premarket. One of the few up stocks is Clorox, up nearly 4% in the premarket. -Melloy

6:30 am: Here’s where things stand for stocks

It’s been a dismal week for stocks, and futures suggest there may not be a reprieve just yet. Here’s where things stand. —Fitzgerald

  • Dow: dropped 3,225 points in the last 4 sessions, down 11.1% this week, putting it on track for its worst weekly performance since Oct. 2008.
  • S&P 500: coming off six straight negative sessions, down 10.8% for the week, on track for its worst weekly performance since Oct. 2008.
  • Nasdaq Composite: down 10.6% on the week, also on pace for its worst week since the financial crisis.

6:20 am: 10-year yield drops to fresh all-time low

The 10-year U.S. Treasury note yield fell to a fresh record low as investors sought out a safe haven from the stock market’s volatile downside moves. The benchmark rate broke below 1.2% for the first time ever, last trading around 1.18%. Yields move inversely to prices. It ended last week above 1.47%. Friday’s move come as U.S. stock futures pointed to another sell-off in equities. —Imbert

6:15 am: U.S. stock futures point to losses at the open, Dow set for more than 400-point drop

U.S. stock futures are pointing to losses across the board at the open on Friday. The looked set to open nearly 400 points lower, with the and also pointing to losses. The sharp drop came after California Gov. Gavin Newsom said the state is monitoring 8,400 people for coronavirus.

The Dow plunged nearly 1,200 points on Thursday, the benchmark’s biggest one-day point drop ever, as worries over the coronavirus possibly spreading and denting global growth sent stocks in tailspin. The Dow, S&P 500 and Nasdaq all closed in correction territory, down at least 10% from its most recent high.

The Dow has lost more than 3,200 points this week, on pace for its worst week since the financial crisis. —Fitzgerald

—CNBC’s Tom Franck, Yun Li, Jeff Cox and Michael Bloom contributed reporting. 

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