North American stock market plunges as trading day begins

Photo: The Canadian Press

Canada's main stock index posted a triple-digit decline in early trading and U.S. stock markets also fell as the volatile swings on financial markets continued for another day amid concerns about the economic fallout from the novel coronavirus outbreak that began in China.

The S&P/TSX composite index was down 193.26 points at 16,586.27.

In New York, the Dow Jones industrial average was down 665.76 points at 26,425.10. The S&P 500 index was down 71.01 points at 3,059.11, while the Nasdaq composite was down 178.01 points at 8,840.08

The Canadian dollar traded for 74.53 cents US compared with an average of 74.67 cents US on Wednesday.

The April crude contract was up five cents at US$46.83 per barrel and the April natural gas contract was down 1.2 cents at US$1.815 per mmBTU.

The April gold contract was up US$16.30 at US$1,659.30 an ounce and the May copper contract was down 1.80 cents at US$2.5680 a pound.

The S&P 500 sank more than 2% in early trading Thursday as the market swung back to fear about the effects of a fast-spreading virus in its latest yo-yo move. Just a day earlier, the index had soared 4.2%, in part on hopes that more aggressive moves by governments and central banks around the world could help contain the economic fallout.

Get used to such vicious swings, which will likely keep going as long as the number of new infections continues to accelerate, many analysts and professional investors say. The S&P 500 has had four straight days where it has lurched by at least 2% in either direction, something that hasn't happened since since 2011.

In China, where the number of new infections has been slowing drastically, Shanghai-traded stocks have rallied nearly 12% since hitting a bottom on Feb. 3. They’re just 1.6% away from wiping out the last of the losses they’ve sustained since the new virus began to spread late last year.

Travel-related companies continued to fall sharply on worries that frightened customers won't want to confine themselves in planes, boats or hotels with others. Royal Caribbean Cruises sank 11.2%, American Airlines Group lost 8.1% and MGM Resorts International fell 7.5%.

Asian stock markets started Thursday off higher, riding the wave of optimism and hope that sent the U.S. market higher on Wednesday. U.S. congressional leaders reached a deal on a bipartisan $8.3 billion spending bill to battle the coronavirus outbreak, and the Bank of Canada followed up on the Federal Reserve’s surprise cut to interest rates the day before with its own. Health care stocks got a particularly big boost after victories by Joe Biden in state primaries launched him into contender status for the Democratic presidential nomination with Bernie Sanders. Many investors see Sanders’ health care plan as damaging to the industry’s profits.

Japan’s Nikkei 225 rose 1.1%, South Korea’s Kospi gained 1.3% and stocks in Shanghai jumped 2%.

But markets turned lower as trading moved west to Europe. The French CAC 40 fell 2.4%, Germany’s DAX lost 2.2% and the FTSE 100 in London dropped 2.1%.