By Geoffrey Smith
Investing.com -- Panic selling continued in the U.S. stock market on Friday, putting the market on course for its biggest weekly loss since 2008 amid growing signs that the coronavirus outbreak will ultimately cause an economic shock in Western economies as well as in China and its Asian trading partners.
The Dow Jones Industrial Average opened with another loss of 627 points, or 2.6%, taking it below the 25,000 mark. By 9:33 AM ET (1433 GMT), the DJIA had rebounded to 25,139 points, down 2.4%. The S&P 500 was also down 2.4% at its lowest since October 2019. The Nasdaq Composite, meanwhile, fell 2.2%.
Overnight, another sharp jump in the number of confirmed Covid-19 cases in South Korea and Iran, coupled with new emergency virus containment measures in Germany, Switzerland and elsewhere, all contributed to keeping the mood negative. A better-than-expected monthly rise of 0.6% in U.S. personal income in January was of little consolation.
"The landscape remains very uncertain," said Mark Dowding, chief investment officer of BlueBay Asset Management in a weekly note. "For now, there is a sense with the coronavirus that things will need to get worse before they can get better."
He argued that the point of "maximum bearishness" could be another couple of weeks away.
"This could coincide with the moment that Covid19 is officially declared a pandemic by the World Health Organization," something that could lay the groundwork for a coordinated response of policy stimulus, Dowding argued. Such hopes seem far away at the moment, with the U.S. and German governments both playing down the seriousness of the situation.