Stocks renew slide on concerns of severe coronavirus hit

Stocks are falling again on Thursday as the economic impact of the global coronavirus spread becomes clearer.

The Dow fell more than 600 points, or 2.5%, to 26,414 shortly after markets opened on Thursday. The S&P 500 declined 2.4% and the tech-heavy Nasdaq dropped 2%, erasing half of their gains from Wednesday’s rally.

The Institute of International Finance predicted that U.S. economic growth would slow to 1.3% this year and that global expansion could hit its lowest level since the 2008 financial crisis.

A United Nations report released on Wednesday found that the impact of the novel coronavirus spread could cost the global economy as much as $50 billion.

Capital Economics, which advises institutional investors, estimates that a modest coronavirus outbreak lasting roughly three months would lower U.S. growth by a modest 0.2% this year.

“Our current working assumption is still that the number of coronavirus cases in the U.S. is restricted to the low tens of thousands which, in a country of more than 325 million, would represent an infection rate of less than 0.1%,” the firm said in a report. “Furthermore, we suspect that the number of cases will drop off again once summer arrives, meaning that the economic disruption would last for little more than one quarter.”

A severe pandemic lasting upwards of 12 months would slam growth, pushing the country’s annual gross domestic product by 3%, according to the firm.

First published on March 5, 2020 / 9:52 AM

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