Dow Drops More Than 900 Points, Ending Worst Week Since 2008

NEW YORK (AP) -

Wall Street ended the week the same way it began: in full retreat from the coronavirus.

Stocks fell sharply and the price of oil sank Friday as federal and state governments moved to shut down bigger and bigger swaths of the nation’s economy in the hope of limiting the spread of the outbreak.

The Dow Jones Industrial Average slid more than 900 points, ending the week with a 17.3% loss. The index has declined in four of the last five weeks.

The latest sell-off wiped out the gains from a day earlier and capped the market’s worst week since the financial crisis of 2008.

Investors are worried that the coronavirus will plunge the U.S. and other major economies into deep recessions. Steps to contain the spread of the outbreak are causing massive disruptions and layoffs.

Friday’s selling accelerated after New York Gov. Andrew Cuomo ordered that most workers stay home. The declaration came a day after California announced similar measures. The move leaves retailers and other businesses dependent on consumer traffic in economic limbo as they close doors and furlough or lay off workers.

The measures also mean less demand for oil. U.S. crude dropped about 21% and moved below $20 a barrel for first time since February 2002.

The Dow fell 913.21 points, or 4.5%, to 19,173.98. The S&P 500, the benchmark for many index funds held in retirement accounts and the measure preferred by professional investors, fell 4.3% after being up 1.8% earlier. The index is down 31.9% since reaching a record high a month ago.

Investors sought safety in U.S. government bonds, driving their yields broadly lower. The 10-year Treasury yield, which influences interest rates on mortgages and other consumer loans, slid to 0.88% from 1.12% late Thursday. At least that’s normal markets behavior. Earlier in the week investors were selling stocks and bonds at the same time in a desperate rush to raise cash.

Oil has been plunging recent weeks as investors anticipate a sharp drop in demand for energy as manufacturing, travel and commerce grind nearly to a halt. A price war between Saudi Arabia and Russia has also pushed oil lower.

European and Asian markets closed broadly higher.

On Capitol Hill, lawmakers continued to work to finalize a $1 trillion-plus aid package to prop up households and the U.S. economy that would put money directly into Americans’ pockets. President Donald Trump has embraced the stimulus, believing it is needed to stabilize the economy and stock markets, which have been pummeled by the crisis.

Even with the market’s broad slide, airlines, hotels and cruise line operators climbed as Congress worked on the economic stimulus bill that would include billions to bail out those industries. United Airlines surged 15.1% and MGM Resorts International jumped 18.3%. Carnival rose 20%. Despite the big gains, the stocks are still down sharply for the year.

In just its latest move to backstop the markets, the U.S. Federal Reserve said Friday it would seek to hold down spiking interest rates in the state and municipal bond market by supporting banks’ purchase of the bonds.

Markets are likely in for more turblence next week as investors get a better look at the economic fallout from businesses closures and layoffs. Goldman Sachs Group analysts project that this week’s U.S. unemployment aid applications increased more than 2 million, a record.