Dow futures slide 700 points on pessimism over coronavirus impact

Global stock markets, bond yields and oil prices dropped sharply again Friday as pessimism prevailed over hopes for central bank action to counter the economic disruption from the virus outbreak.

Rumors that Chinese officials might be overstating the extent to which local businesses are getting back to work also were undermining confidence, traders said.

Dow futures dropped 700 points while Standard and Poor’s 500 futures declined 2.6%. Futures trimmed some losses after U.S. employers added 273,000 jobs in February despite a slowing economy, worker shortages and early coronavirus fears.

Bond yields slumped to new lows as traders expected central banks to have to cut interest rates and flocked to government debt as a haven of safety. Markets have endured roller coaster ups and downs for weeks amid uncertainty over how much damage the outbreak of the new coronavirus will do to the global economy.

“At this point no one can really explain why the markets behave the way they do, and what may be next. The only thing we can say is this high volatility is bad,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

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After shutting down most business and ordering tens of millions of people to stay home in the most stringent mass quarantine efforts ever, the Chinese government has been gradually urging companies to get back to work while taking precautions to protect their employees.

But it’s virtually impossible to know just close to normal the situation has become in such a vast country. Communist Party officials have a long tradition of embellishing on statistics to fit official targets.