Stocks Tumble as Virus Fears Spark Sell-Off

U.S. stocks are closing with sharp losses as investors worry about the potential economic impact of the outbreak of a new virus from China. The declines in the U.S. followed a sell-off in markets in Europe and Japan. The Dow Jones Industrial Average fell 453 points, or 1.6%, to 28,535. The S&P 500 index fell 51 points, or 1.6%, to 3,243. The Nasdaq fell 175 points, or 1.9%, to 9,139. Investors headed for safer holdings. Bond rose and the yield on the 10-year Treasury fell to its lowest level since October. Gold prices also rose. Airlines and resort operators suffered steep losses.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. stocks tumbled Monday afternoon after China announced a sharp rise in cases of a new virus that threatens to crimp global economic growth.

The Dow Jones Industrial Average and S&P 500 each fell about 1.1%, giving up a significant portion of their gains for January. Airlines, resorts and other companies that rely on travel and tourism suffered steep losses. Gold prices rose as did bonds as investors headed for safer holdings. The yield on the 10-year Treasury fell to 1.61%, its lowest level since October.

The market’s slide, which followed a sell-off in markets in Europe and Japan, had the benchmark S&P 500 index on track for its worst day since early October.

Investors are in a “sell first, ask questions later situation,” said Alec Young, managing director of global markets research at FTSE Russell.

Chinese health authorities have confirmed 2,750 cases of the virus along with 81 related deaths as authorities extended a week-long public holiday by an extra three days as a precaution against having the virus spread still further. The virus has spread to a dozen countries, including the U.S. Besides the threat to people’s lives and health, investors are worried about how much damage the virus will do to profits for companies around the world.

The Dow Jones Industrial Average fell 325 points, or 1.1%, to 28,664 as of 1:34 p.m. EST. The Dow had been down nearly 550 points. The S&P 500 index dropped 37 points, or 1.1%, to 3,257. The Nasdaq lost 132 points, or 1.4%, to 9,182. The Russell 2000 index of smaller company stocks gave up 0.8% to 1,649.

Most markets in Asia were closed for the Lunar New Year holiday, but Japan’s Nikkei fell 2.03%, its biggest decline in five months. European markets also slumped. Germany’s DAX dove 2.7%.

Even if they’re thousands of miles away from Wuhan, the interconnected global economy means U.S. companies have plenty of customers and suppliers in China. It’s the world’s second-largest economy, and it accounts for 6% of all revenue for S&P 500 companies over the last 12 months. That’s nearly double any other country besides the United States, according to FactSet.

“Markets hate uncertainty, and the coronavirus is the ultimate uncertainty in that no one knows how badly it will impact the global economy,” Young said.

Resort operators were among the biggest losers in the S&P 500. Wynn Resorts fell 6.9% and Las Vegas Sands shed 6%. Those companies get the majority of their revenue from the Chinese gambling haven of Macao. MGM Resorts fell 3%.

American Airlines fell 5.2% and Delta dropped 3.8% as part of a broad slide for airlines because of concerns international travel will decline amid the virus’ spread.

Booking companies and cruise-line operators are also getting hurt. Expedia Group fell 2.2% and Carnival fell 4%.

Chinese companies that trade shares in the U.S. fell. Search engine operator Baidu fell 2.3% and e-commerce company JD.com dropped 2.6%.

The technology sector, the biggest in the S&P 500, also saw heavy selling. Apple, which relies on China for supplies and sales, fell 2.4%.

Financial stocks also took steep losses. Citigroup slid 2.2%.

Energy stocks fell broadly as U.S. oil prices slid 2.4% on worries about reduced demand from China. Schlumberger skidded 4.4%.

Household goods makers, real estate companies and utilities were all down slightly, holding up better than most of the market. The sectors are viewed as less-risky and are not as affected by international issues and developments.

A few companies managed to climb against the sliding markets. Bleach and cleaning products maker Clorox rose 1.7%.

Small biotechnology companies and drug developers made some of the biggest gains. Cleveland BioLabs more than doubled, while NanoViricides and BioCryst also climbed sharply.

Investors are also dealing with a heavy week of corporate earnings. Apple will report financial results on Tuesday. Pharmaceutical giant Pfizer and Starbucks will also report.

Boeing, McDonald’s, Coca-Cola and Amazon are also among some of the biggest names reporting earnings throughout the week that includes 147 S&P 500 companies.