Dow Jones industrial average tumbles 879 points as bond yields slump

Dow stabilizes after tumbling more than 1,000 points

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U.S. stocks tumbled for a fourth consecutive session on Tuesday as bond yields slumped to a record low, raising further concerns over the potential global economic fallout from the coronavirus outbreak.

Stocks accelerated losses after a federal health official warned that the deadly virus could cause “severe” disruptions in the U.S. Investors sought safety in U.S. government bonds, sending the yield on the 10-year Treasury to a record low of 1.328%. That eclipsed its previous low made in July 2016 in the wake of the Brexit vote. 

The 10-year Treasury is a closely watched barometer for the U.S. economy. The drop in yields signals growing concern among investors that the virus outbreak could further dent an already slowing global economy, analysts say.

“The drop in yields was a big red flag,” says Matt Nadeau, wealth advisor at Piershale Financial Group. “It reinforced fears among investors that there’s extra pressure on the global economy.” 

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