US stocks plunge after CDC warns US to prepare for coronavirus outbreak

New York — US stocks plunged to an 11-week low and bond yields fell to records on rising concern the coronavirus will upend global supply chains critical to economic growth.

The S&P 500’s four-day rout topped 7%, with losses accelerating on Tuesday after the US Centers for Disease Control and Prevention (CDC) warned Americans to prepare for a coronavirus outbreak at home.

The CDC said Americans should prepare for significant disruptions of daily life if the coronavirus outbreak that began in China begins to spread in the US, describing emergency plans that mimic the drastic measures taken by other countries. That could include school closings, cancellations of sporting events, concerts and business meetings.

The US is preparing as if the virus will become a pandemic, with spread in the US, said Nancy Messonnier, the director of the CDC’s National Center for Immunization and Respiratory Diseases.  “It is not a matter of if, but a question of when, this will exactly happen.”  

That follows a rapid increase in cases from Italy to Iran, South Korea and Japan, with a growing list of companies warning that profits will suffer as economies around the world suffer.

The S&P, Dow Jones Industrial Average and Nasdaq Composite indexes have all set record highs in February.

The 10-year US Treasury yield fell to a record low of 1.3055% as investors sought shelter from the virus’s impact on the outlook for growth. All 11 sectors in the S&P 500 fell with energy, material and financial shares leading the declines. Volatility spiked, sending the Cboe’s measure of equity gyrations surging past 30 for the first time since 2018.