Stocks renew slide on concerns of severe coronavirus hit

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Click to copy RELATED TOPICS European Union AP Top News Technology North America Financial markets Health Business China Euro Europe Economy Stocks plunge to 8-month lows on growth fears; J&J nosedives By MARLEY JAY 20 minutes ago Timothy Nick FILE- In this Nov. 29, 2018, file photo trader Timothy Nick works on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Friday, Dec. 14. (AP Photo/Richard Drew, File)

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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