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Stocks fall, bond yields take another breathtaking drop


NEW YORK — Stocks kept falling sharply Friday, and bond yields took even more breathtaking drops as a brutal, dizzying couple weeks of trading showed no sign of letting up.

Even a better-than-expected report on U.S. jobs wasn’t enough to pull markets from the undertow. It’s usually the most anticipated piece of economic data each month, but investors looked past February’s solid hiring numbers because they came from before the new coronavirus was spreading quickly across the country.

Fear coursed across borders and across markets. The lowlight was another plunge in the yield on the 10-year Treasury. Yields fall when investors are worried about a weaker economy and inflation ahead, and the 10-year yield touched 0.70% in Friday morning trading. Earlier this week, it had never in history been below 1%. It was 1.90% at the start of the year, before the virus fears took off.

“The bond market says the monster under the bed is much bigger and scarier than anyone expects right now,” said Ryan Detrick, senior market strategist at LPL Financial.

U.S. stock indexes slumped another 3% in the first minutes of trading, following 4% losses for Europe and 2% losses for Asia. Crude oil lost more than 4% in part on worries that an economy weakened by the virus will burn less fuel. A measure of fear in the U.S. stock market surged 22%

At the heart of the drops is the fear of the unknown. This is a new virus, and health experts aren’t sure how far it will spread and how much damage it will ultimately do. The number of infections is nearing 100,000 worldwide, people around the world are cancelling travel plans and businesses are reporting hits to revenue. An interconnected global economy also means many U.S. companies depend on suppliers in countries spread around the world, which raises the risk of business interruptions as the virus and potential quarantines spread.

Not knowing how bad this crisis can ultimately get, some investors are reacting by simply selling. And many experts say they expect such sharp swings in the market to continue as long as the number of new cases accelerates.

The S&P 500 was down 3% as of 9:47 a.m. Eastern time. It has been a particularly tumultuous week, and every day has seen a swing of more than 2%. On Monday, it was up 4.6%, then down 2.8%, up 4.2% and down 3.4%.

If Friday’s moves hold, this will be the first time the S&P 500 has swung more than 2% in either direction over five straight days since December 2008. That was during the depths of the financial crisis, when investors worried that the world’s financial system may melt down.

The Dow Jones Industrial Average lost 753 points, or 2.9%, to 25,368, and the Nasdaq fell 2.7%.

The S&P 500 had set a record high just two weeks ago, on Feb. 19. It’s lost 13% since then.

The yield on the 10-year Treasury fell to 0.71% from 0.92% late Thursday. The two-year yield fell to 0.44% from 0.62%, and the 30-year yield fell to 1.26% from 1.57%.

Stan Choe And Damian J. Troise, The Associated Press

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