NEW YORK - The Dow Jones Industrial Average slumped more than 600 points Friday as a virus outbreak that originated in China continued to widen, stoking stock investors' worries about the potential global economic fallout.
The broad sell-off erased the S&P 500's gains for January, which began with the market benchmark at record highs. The index is on track for its second weekly loss and its biggest weekly decline since early August.
The virus has infected almost 10,000 people globally in just two months, a troublesome sign of its spread that prompted the World Health Organization to declare the outbreak a global emergency. That designation signals that the virus is now a significant risk to other countries and requires a global response.
Cases have spiked in China, along with deaths there, and the U.S. is now advising against all travel to the world’s second-largest economy. The move weighed on airline and energy stocks. It also helped push oil prices lower.
American Airlines fell 3.2% and Delta Air Lines slipped 2.4% after both companies suspended flights to and from China.
“The economic and market impact now are becoming much more significant and those two sectors are probably the most important to keep an eye on,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “If you're going to restrict travel and you're going to restrict movement, you're by default going to hit energy prices."
Technology stocks led the losses. Apple, which relies on Chinese consumers for sales and factories for supplies, fell 3.9%. Nvidia slid 3.8% and other chipmakers slipped.
Banks and energy companies also broadly fell. Exxon and Chevron both fell after issuing fourth-quarter results.
Bond prices rose. The yield on the 10-year Treasury fell to 1.51% from 1.55% late Thursday. In another sign of how much fear is in the market, the yield on teh three-month Treasury rose above the 10-year yield, a relatively rare ocurrence that hasn't happened since October. Investors see such inversions as a fairly reliable warning signal of a recession within a year or so, though its track record isn't perfect.