This Is Why the Dow Jones Crashed More Than 500 Points, Crypto Coins News

The Dow crashed more than points on Friday.
The stock market’s most closely watched index has now declined since the start of .
Here’s what catalyzed the Dow’s brutal decline.

After enduring a shellacking amid the coronavirus outbreak, things seemed to be looking up for the Dow Jones Industrial Average.

Encouraging comments from the World Health Organization calmed fears about the epidemic, sparking an aggressive stock market rally on Thursday afternoon.

In retrospect, all that did was tee the Dow up for an even more punishing decline on Friday morning.

U.S. Stocks Collapse After Airlines Halt China Flights

The stock market had already opened to sharp losses after global growth bellwether Caterpillar issued a foreboding assessment of the outlook for .

But the Dow Jones crash really began to accelerate after multiple U.S. airlines suddenly suspended all flights between China and the U.S.

With the number of coronavirus cases in China ticking ever closer to 30, 10, both Delta and American Airlines announced that they would halt flights to China. Delta’s suspension will take effect next week and last through April , while American’s is effective immediately and in force through March [ABC News].

Only one U.S. carrier – United Airlines – has yet to suspend its China flights. Its competitors ’announcements could increase the pressure for United to follow suit.

The news rocked a Dow Jones that had become prematurely complacent about the risks that the coronavirus outbreak present to the stock market.

Thursday’s late afternoon rally came after the World Health Organization labeled the epidemic a global health emergency . Markets had been bracing for that designation, but the WHO statement was far less alarmist than investors had expected.

Most importantly, the WHO did not recommend restricting travel to and trade with China.

The Committee does not recommend any travel or trade restriction based on the current information available.

But U.S. airlines aren’t taking any chances, and that fear is bleeding into financial markets as investors grapple with the potential economic fallout from the pneumonia-like virus.

Dow Crashes More Than Points

The flight suspensions crushed an already-fragile Dow Jones Industrial Average. As of : PM ET, the Dow had crashed (points or 1.8% to , . .

The Dow crashed more than points on Friday. | Source: Yahoo Finance

All but doomed to record its second straight weekly loss, the Dow’s year-to-date gains have completely vanished.

The S&P (plunged by 1.) % to 3, . .

The Nasdaq rounded out a catastrophic day on Wall Street with a decline of 1. % to 9, . .

European stocks didn’t fare any better. Reports that coronavirus had arrived in the UK sent the FTSE 1.3% lower and the pan-European STOXX more than 1% into the red.

Gold Shoots Higher as Yield Curve Inverts

The rabid flight from risk sent bond and gold prices spiraling higher, rocking Treasury yields and catalyzing an ominous yield curve inversion between the 30 – year and 3-month notes.

One part of the Treasury yield curve inverted on Friday. A yield curve inversion is often – though not always – a leading indicator of recession. | Source: St. Louis Fed

The yield curve inversion – a classic recession signal – likely contributed to gold’s rally. The price of the yellow metal is up more than 4% since the beginning of January and continues to edge closer to $ 1, .

The gold price is reveling in the stock market’s decline. | Source: Yahoo Finance

The coronavirus outbreak continues to batter oil prices, which will likely fall for a fourth straight week. WTI crude futures slid 1.4% to $

per barrel, while Brent crude dipped 0. (% to $) . per barrel.

This article was edited by Sam Bourgi .

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