The US markets settled lower deeply in red on Thursday taking benchmark indexes into correction territory and to the lowest levels since October, as the global coronavirus epidemic disrupted international trade and travel. The Dow is now down 9.71% for the year, while the S&P 500 is off 7.80% year-to-date, and the Nasdaq has lost 4.53%. Investors’ sentiment took another hit when California’s governor said 8,400 people were being monitored after travelling to China. World Health Organization said that the outbreak has the potential to become a pandemic and is at a decisive stage. The latest slide began after a news conference by President Donald Trump failed to reassure investors and more new cases of the disease were reported outside China than inside for the first time. The global economy is on course for its weakest year since the 2008 financial crisis as efforts to contain epidemic has hit manufacturing activity in China.
On the economic data front, a report released by the Commerce Department showed the pace of US economic growth in the fourth quarter of 2019 was unrevised from the initial estimate. The Commerce Department said real gross domestic product increased by 2.1 percent in the fourth quarter, unchanged from the estimate provided last month and in line with street estimates. The report showed upward revisions to private inventory investment, exports, federal government spending, and residential fixed investment. Meanwhile, first-time claims for US unemployment benefits climbed by more than expected in the week ended February 22nd, according to a report released by the Labor Department. The report said initial jobless claims rose to 219,000, an increase of 8,000 from the previous week's revised level of 211,000. Street had expected jobless claims to inch up to 212,000 from the 210,000 originally reported for the previous week.
Dow Jones Industrial Average dropped 1,190.95 or 4.42 percent points 25,766.64, Nasdaq declined 414.3 points or 4.61 percent to 8,566.48 and S&P 500 was down by 137.63 points or 4.42 percent to 2,978.76.
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