The stock market got off to roaring start in January, until a virus outbreak that started in China wiped out its gains.
The Dow Jones Industrial Average skidded more than 600 points Friday as the outbreak continued to widen, stoking fears that the travel restrictions and other uncertainties caused by the health emergency in the world’s second-largest economy could dent global growth.
Technology companies, which do a lot of business with China, led the losses. Airlines fell after Delta and American suspended flights to and from China. The sell-off erased the S&P 500’s gains for January and gave the benchmark index its biggest weekly loss since August.
Just two weeks ago, the S&P 500 had closed at an all-time high, having climbed around 13% since early October. A preliminary trade deal signed by the U.S. and China earlier in the month eased a big source of uncertainty in the markets. Volatility was running at 12-month lows and even a dust up between the U.S. and Iran didn’t rock markets. Then came the virus outbreak in China.
Markets around the globe have sold off on concerns about the potential economic impact of the outbreak. The U.S. stock market, which had calmly been setting record after record, suffered its worst January since 2016 and its first monthly loss since August.
The virus has infected almost 10,000 people in just two months, mostly in China. The World Health Organization has declared the outbreak a global emergency, a designation that signals that the virus is now a significant risk to other countries and requires a global response. The death toll stood at 213, including 43 new fatalities, all in China.
The S&P 500 sank 58.14 points, or 1.8%, to 3,225.52. The Dow Jones industrials fell 603.41 points, or 2.1% to 28,256.03 The Nasdaq dropped 148 points, or 1.6%, to 9,150.94.