U.S. stock futures pointed to more losses early Friday after the major indexes suffered a tumble that sent them more than 10% below their record highs.
As of 6:20 a.m. ET, Dow Jones Industrial Average futures indicated an opening loss of more than 400 points. S&P 500 and Nasdaq 100 futures also pointed to a sharply lower open on Friday.
Meanwhile, bond yields also continued to slip as the yield on the benchmark U.S. 10-year Treasury touched new record lows. It was last at 1.18%.
The Dow plummeted nearly 1,200 points on Thursday — its biggest one-day point drop ever — as worries over the coronavirus possibly spreading sent stocks spiraling lower. The 30-stock average closed in correction territory along with the S&P 500 and Nasdaq Composite.
The Dow had closed at a record high on Feb. 12. It only took the S&P 500 six days to fall from an all-time high into correction levels, marking the broad index’s fastest drop of that magnitude.
“People have been so preconditioned to buy the dip and to always expect the market to recover that people can get smacked around with moves like this,” said Patrick Hennessy, head trader at IPS Strategic Capital. “No one knows how this thing ends.”
Thursday’s declines also put the Dow and S&P 500 down more than 10.5% each for the week, on pace for their worst weekly performance since 2008.
The sharp drop came after California Gov. Gavin Newsom said the state is monitoring 8,400 people for coronavirus. Meanwhile, the CDC confirmed on Wednesday evening the first U.S. coronavirus case of unknown origin in Northern California, indicating possible “community spread” of the disease.
The number of confirmed coronavirus cases outside of China has also jumped. In South Korea, more than 1,700 cases have been confirmed along with over 600 in Italy.
“The timing of this was just the worst with respect to investor sentiment being elevated,” said Doug Ramsey, chief investment officer at The Leuthold Group. “I’m not sure that the market has really priced in the potential economic impact of this.”
Concerns over the coronavirus have also led several companies to issue earnings and revenue warnings. Microsoft said Wednesday one of its key divisions may not meet the company’s previous revenue guidance. PayPal also warned about its outlook on Thursday.
Goldman Sachs’ David Kostin warned U.S. companies will see no earnings growth this year. “Our reduced proﬁt forecasts reﬂect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US ﬁrms, a slowdown in US economic activity, and elevated business uncertainty,” said Kostin, the bank’s chief U.S. equity strategist.