Dow tumbles 879 points, bond yields slide on coronavirus fears

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.

The Dow Jones Industrial Average has shed nearly 2,000 points over the past two days and is off 8.4% from its record, putting it on the brink of a correction, generally defined as a decline of 10% from a recent high. With Tuesday’s losses, the blue-chip average is down 5% for the year.

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.

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