Updated at 2:56 p.m. ET
Stocks took another steep dive Friday, deepening a multi-day rout fueled by fears about the coronavirus’ impact on the global economy.
The Dow Jones Industrial Average added more than 600 points to its losses by Friday afternoon, one day after plunging 1,190 points on Thursday.
The S&P 500 stock index lost nearly 2% and is now down almost 16% from the all-time high it reached only last week.
Around the world stocks also fell. Asian stock indexes finished down more than 3%, and markets also finished significantly lower in Europe, with one key index heading for its worst week since the 2008 financial crisis.
Federal Reserve Chairman Jerome Powell sought to calm jittery investors, with reassurance that the central bank is prepared to cut rates if necessary.
“The fundamentals of the U.S. economy remain strong,” Powell said in a rare, written statement. “However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”
The Trump Administration sought to reassure investors about the market plunge, saying it was unlikely to affect the broader economy.
Larry Kudlow, director of the National Economic Council, called the downturn a “short-term market plunge” and said, “I don’t think at this point it’s going to have much of an impact.”
Kudlow said he had spoken to corporate CEO’s and had not heard of serious supply-chain problems.
But investors appear anxious anyway, and the interest rate on U.S. government debt, which usually falls in turbulent times, lost more ground. The 10-year Treasury bill dipped to a record low of 1.15%.
The past week has seen a sudden, dizzying drop in stock prices, as investors grapple with growing evidence that the deadly coronavirus epidemic is spreading well beyond China.
South Korea and Italy have seen significant clusters of cases, and many more countries, including the United States, are reporting new outbreaks.
With the S&P 500 index down, the market is officially in what Wall Street calls a market correction when stocks are at least 10% below a recent high.
All three major stock indexes posted their largest ever point drops on Thursday.
Companies around the world are cutting production and canceling conferences to limit the outbreak’s spread. JPMorgan Chase announced it is eliminating nonessential employee travel, while United Airlines said today it is reducing flights to Japan, Singapore and South Korea.
As businesses slow down, economists say the odds of a global recession have increased significantly.
“With the coronavirus pandemic spreading throughout the world, falling corporate sales and its economic impact will depress economic growth,” wrote Sung Won Sohn, professor of economics at Loyola Marymount University.