Dow drops more than 1,000 points as fear of virus threatens global economy

The Dow Jones industrial average plummeted more than 1,000 points Monday amid a broad global markets selloff as a surge in virus cases and a worrisome spread of the disease outside China sent investors running for safety.

The selling wiped out all of the Dow Jones industrial average’s gains for the year.

More than 79,000 people worldwide have been infected by the coronavirus. China, where the virus originated, still has the majority of cases and deaths. The rapid spread to other countries is raising anxiety about the threat the outbreak poses to the global economy.

South Korea is now on its highest alert for infectious diseases after cases there spiked. Italy reported a sharp rise in cases and a dozen towns in the northern, more industrial part of that country are under quarantine. The nation now has the biggest outbreak in Europe, prompting officials to cancel Venice’s famed Carnival, along with soccer matches and other public gatherings.

There are also more cases of the virus being reported in the Middle East as it spreads to Iran, Iraq, and Kuwait, among others.

The Dow fell 1,031 points, or 3.6%, to 27,960. At its low point, it lost 1,079 points. The S&P 500 index skidded 111 points, or 3.4%, to 3,225. The Nasdaq dropped 355 points, or 3.7%, to 9,221.

Investors looking for safe harbors bid up prices for U.S. government bonds and gold. The yield on the 10-year Treasury note fell sharply, to 1.38% from 1.47% late Friday. Gold prices jumped 1.7%.

“Stock markets around the world are beginning to price in what bond markets have been telling us for weeks – that global growth is likely to be impacted in a meaningful way due to fears of the coronavirus,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

The viral outbreak threatens to crimp global economic growth and hurt profits and revenue for a wide range of businesses. Companies from technology giant Apple to athletic gear maker Nike have already warned about a hit to their bottom lines. Airlines and other companies that depend on travelers are facing pain from cancelled plans and shuttered locations.

Crude oil prices slid 3.7%. Aside from air travel, the virus poses an economic threat to global shipping.

Technology companies were among the worst hit by the sell-off. Apple, which depends on China for a lot of business, slid 3.4%. Microsoft dropped 2.6%. Banks were also big losers. JPMorgan Chase fell 2.1% and Bank of America slid 4.4%.

Airlines and cruise ship operators also slumped. American Airlines lost 8.2%, Delta Air Lines dropped 5.8%, Carnival skidded 7.9% and Royal Caribbean Cruises gave up 7.7%.