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Coronavirus fears slam banks, travel stocks

Video Credit: Reuters Studio
Published on March 6, 2020 - Duration: 02:23s

Coronavirus fears slam banks, travel stocks

U.S. stocks suffered another sharp drop, led by financial and travel stocks, as a new wave of fear about the spread of the coronavirus and its economic impact gripped investors.

Conway G.

Gittens reports.

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Coronavirus fears slam banks, travel stocks

The selling stampede returned to Wall Street Thursday after taking a break the day before.

Investors' nerves were rattled as the coronavirus continued to spread in the U.S. and abroad.

In another dizzying drop - the Dow slumped 969 points.

The S&P 500 fell 106, the Nasdaq got clobbered -down 279 points.

All of the major stock market indices stumbled back into correction territory - meaning they're down 10 or more percent from record highs set in February.

Another sign of investor fear: Yields on the benchmark 10-year note, used to set lending rates for mortgages, credit cards, and car loans, continued to collapse.

It plunged below 0.9 percent for the first time ever.

Carol Schleif, deputy chief investment officer at Abbot Downing, predicts rates will remain low for the foreseeable future.

SOUNDBITE (ENGLISH) CAROL SCHLEIF, DEPUTY CHIEF INVESTMENT OFFICER, ABBOT DOWNING, SAYING "It's definitely unprecedented territory.

We haven't ever seen the 10-year where it is at and one would expect some kind of rebound hopefully for that but it's going to take confidence in the market and that's going to be in short supply I think in the next few days, if not the next weeks until this sorts itself out and seems to stabilize." As historic low rates put the squeeze on banks who won't be able to make as much money from lending- Financials was the worst performing sector on Thursday.

Dow component J.P.

Morgan Chase shed 5 percent.

Another sector deep in the red: travel and tourism.

Southwest Airlines, which basically flies solely in the U.S., said bookings have dropped and cancellations have increased as the coronavirus outbreak scares travelers away.

The stock slumped to a 2016 low on the revenue warning.

And cruise operators were punished after California refused to let a cruise ship with sick passengers dock.

Carnival Corp tumbled 14 percent.

Royal Caribbean slid 16 percent and Norwegian Cruise Line was down 14 percent as well.

The coronavirus outbreak is also damaging prospects for the energy sector.

OPEC wants to counter that with its biggest production cut since the financial crisis.

It just needs non-OPEC member Russia to agree in order to make the global reduction in supplies stick.

Oil prices dropped amid uncertainty OPEC will get want it wants.

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