NEW YORK, N.Y. – Shares fell in Asia on Thursday after President Donald Trump announced the U.S. was stepping up its efforts to combat the virus outbreak that began in China.
Japan's Nikkei 225 index lost 2.1% to 21,951.78, while in Australia, the S&P ASX/200 dropped 0.8% to 6,653.50. In South Korea, where 334 new cases of the virus were reported, the Kospi dropped 0.9% to 2,058.10. Hong Kong's Hang Seng lost 0.7% to 26,519.65. Shares also fell in Jakarta, Malaysia, Singapore and Taiwan.
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Trump told reporters he was open to spending “whatever's appropriate” to fight the virus, after the Senate Democratic Leader Chuck Schumer of New York suggested $8.5 billion instead of the requested $2.5 billion. He put Vice President Mike Pence in charge of the effort.
But health officials standing beside Trump warned more infections are coming. And shortly after Trump spoke, the government announced that another person in the U.S. was infected — someone in California who appears not to have the usual risk factors of having traveled abroad or being exposed to another patient.
Major U.S. stock indexes gave up early gains, closing mostly lower Wednesday and extending the market’s heavy losses for the week.
“The market is still digesting the full impact of what the coronavirus could mean for global GDP growth and, more importantly, on earnings growth for a lot of companies,” said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank.
The S&P 500 index fell 0.4% to 3,116.39. It’s on track for its biggest monthly decline since May. The Dow Jones Industrial Average dropped 123.77 points, or 0.5%, to 26,957.59, for a three-day loss of 2,034 points. A modest rally in technology stocks helped nudge the Nasdaq composite to a 0.2% gain, to 8,980.77.
Smaller company stocks fell the most. The Russell 2000 index lost 0.5% to 1,724.76.
Bond yields headed lower for much of the day, but then recovered mostly. The yield on the 10-year Treasury inched up to 1.34% from 1.33% late Tuesday. The yield on the 3-month Treasury bill edged up to 1.51%. The inversion in the yield between the 10-year and the 3-month Treasurys is a red flag for investors because it has preceded the last seven recessions.
“The bond market is sending us some warning signals that we should pay attention to and that’s what you see playing out in the market today,” Lovell said.
Investors have been moving more money into bonds in the wake of the outbreak. Traders are concerned the global economy could slow down as the world’s second-largest economy struggles to contain the outbreak.
“A slowdown definitely is on the horizon, but it’s transitory,” Lovell said. “I would expect economic growth to reaccelerate in the back half of the year as China starts to come online.”
Energy companies led the selling Wednesday as the price of U.S. crude oil fell 2.3%.
Cruise operators continued falling amid persistent virus fears. Norwegian Cruise Line Holdings fell 7.9%, Royal Caribbean Cruises dropped 8.1% and Carnival slid 7.5%.
Other companies that depend on travelers also declined. Expedia lost 7.1%.
Technology stocks eked out a modest gain. The tech sector was among the worst hit by sell-offs this week as many of the companies rely on global sales and supply chains that could be stifled by the spreading outbreak. Microsoft rose 1.2% and Adobe rose 1%.
Benchmark crude oil fell 76 cents to $47.98 in electronic trading on the New York Mercantile Exchange. On Wednesday it lost $1.17 to settle at $48.73 a barrel. Brent crude oil, the international standard, shed 75 cents to $52.06 per barrel. It dropped $1.52 to close at $53.43 a barrel.
Gold jumped $8.50 to $1,651.50 per ounce, silver rose 17 cents to $18.00 per ounce and copper fell 2 cents to $2.58 per pound.
The dollar fell to 110.19 Japanese yen from 110.40 yen on Wednesday. The euro strengthened to $1.0906 from $1.0884.
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AP Business Writers Alex Veiga and Damian J. Troise contributed.