Dow futures drop about 400 points; crude prices sink 2%

U.S. stock market futures sank late Sunday as the spread of coronavirus raised worries that global economic growth could take a hit.

Dow Jones Industrial Average futures fell about 400 points, or 1.3%, to 28,593 early Monday, suggesting a steep drop when U.S. trading starts Monday morning. S&P 500 futures fell 1.3% and Nasdaq-100 futures dropped 1.8%.

On Saturday, the International Monetary Fund warned the virus outbreak could reduce global economic growth (http:// www.marketwatch.com/story/imf-lowers-global-economic-growth-forecast-warns-of-more-dire-scenarios-2020-02-22) by 0.1% this year, and drag China’s annual growth 0.4 percentage points lower than January estimates.

“The world economy is facing a clear slowdown and this slowdown might be reinforced by the so-called coronavirus,” French Finance Minister Bruno Le Maire said at a G-20 finance meeting in Saudi Arabia, according to the Associated Press.

But U.S. Treasury Secretary Steve Mnuchin said Sunday that it was still too early to tell how the outbreak will affect the global economy. “I think we’re going to need another three or four weeks to see how the virus reacts, until we really have good statistical data,” he told CNBC (https://www.cnbc.com/2020/02/23/coronavirus-mnuchin-says-economic- impact-will-be-clearer-within-weeks.html).

Still, the global spread of the virus in patients with no links to China suggests “things are about to get extremely problematic, and market conditions could get exponentially worse this week,” Stephen Innes, chief market strategist with AxiTrader, wrote in a note Sunday.

South Korea’s Kospi sank more than 3% in Monday trading as the country went on high alert (http:// www.marketwatch.com/story/south-korea-goes-on-high-alert-over-virus-italy-battles-to-contain-outbreak-2020-02-23) to contain the spread of the COVID-19 coronavirus. More than 760 people in South Korea have been infected, with most of the diagnoses coming in the past few days. Under the new alert level, the government has the authority to order schools to be closed, stop public transportation and to cut off flights to and from South Korea.

Australia’s S&P/ASX 200 dropped more than 2% in early trading, and stocks also slid in Hong Kong and Shanghai . Japan’s Nikkei is closed Monday for a holiday.

Crude oil prices fell as well, with West Texas Intermediate crude for April delivery and April Brent crude , the global benchmark, each down more than 2%.

Gold prices rose 1%, to $1,666.50.See: Why the coronavirus outbreak is delivering a fresh dose of recession fear to the stock market (http:// www.marketwatch.com/story/why-the-coronavirus-outbreak-is-delivering-a-fresh-dose-of-recession-fear-to-the-stock-market- 2020-02-22)

Authorities in northern Italy canceled some public events (http://www.marketwatch.com/story/venices-famed-pre-lenten- carnival-canceled-to-stem-spread-of-coronavirus-2020-02-23), including Venice’s Carnival, in an effort to reduce the spread of the virus. Italian officials said Sunday they have 152 confirmed cases, the most in any country outside Asia.

China’s President Xi Jinping on Sunday noted the outbreak news was “grim,” (http://www.marketwatch.com/story/chinas- xi-says-epidemic-grim-calls-for-action-to-revive-economy-2020-02-23) but said measures must be taken to get China’s economy going again, including reopening factories in low-risk areas. Experts forecast as much as a 1% reduction in China’s economic output this quarter due to strict quarantines that shuttered businesses and factories.

Chinese officials again reported fewer than 1,000 new cases Sunday, though the overall total in mainland China is nearly 77,000 infected with more than 2,400 deaths.

U.S. stocks slumped Friday, ending a two-week win streak, with tech stocks being hit hardest.

The Dow Jones Industrial Average closed below 29,000, shedding 227.51 points, or 0.8%, at 28,992.40, its worst one- day percentage drop since Feb. 7. The S&P 500 lost 35.48 points, or 1.1%, to settle at 3,337.75, its biggest one-day percentage decline since Jan. 31. The Nasdaq Composite Index lost 174.37 points, or 1.8%, to finish at 9,576.59, its worst single-day percentage fall since Jan. 27, according to Dow Jones Market Data.