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* Indexes drop: Dow 3.54%, S&P 3.49%, Nasdaq 3.95%
* High-growth technology stocks lead slide
* Wall Street's fear gauge surges to over 1-yr high
* Health insurers fall after Bernie Sanders' Nevada victory
(Updates to early afternoon)
By Medha Singh
Feb 24 (Reuters) - The Dow Jones Industrials shed 1,000
points on Monday and the S&P 500 was set for its worst day in
two years as a surge in coronavirus cases outside China clouded
global growth outlook.
Several countries including Iran, Italy and South Korea
reported a rise in virus cases over the weekend, fanning fears
of a pandemic that prompted a rush to safe-haven assets such as
gold and U.S. Treasuries.
An yield curve inversion between the 3-month and 10-year
U.S. Treasuries deepened in a classic recession sign. Adding to
worries, Goldman Sachs slashed its U.S. growth forecast and
predicted a more severe impact from the epidemic, CNBC reported.
The blue-chip Dow .DJI has now erased its gains for the
year, while the benchmark S&P 500 .SPX is about 5% below its
all-time high hit last week. The Nasdaq .IXIC is 6.5% off its
record peak.
All of the 11 major S&P sectors were in the red, led by a
4.1% drop in technology stocks .SPLRCT .
Apple Inc AAPL.O slid 4.4% as data showed sales of
smartphones in China tumbled by more than a third in January.
Wall Street's main indexes notched record highs last week,
partly on optimism that the global economy would be able to snap
back after an initial hit, supported by central banks.
"It is not as though the numbers have changed dramatically
but what has changed is the geography, which adds a new level of
concern," said Art Hogan, chief market strategist at National
Securities in New York.
"What the market is trying to predict here is how large will
this get globally, and when will it start to peak."
China-exposed chipmakers slipped, with the Philadelphia SE
Semiconductor index .SOX dropping 4.7%, while concerns about
growing travel curbs dragged the NYSE Arca Airline Index .XAL
down 6.2%.
The CBOE Volatility Index .VIX , a gauge of investor
anxiety, jumped to its highest level since January 2019.
At 1:06 p.m. ET, the Dow Jones Industrial Average was down
1,027.29 points, or 3.54%, at 27,965.12 and the S&P 500 was down
116.33 points, or 3.49%, at 3,221.42. The Nasdaq Composite was
down 377.81 points, or 3.95%, at 9,198.78.
The S&P 500 fell below its 50-day moving average and the Dow
slipped below its 100-day moving average, all closely watched
indicators of momentum.
Health insurers such as UnitedHealth Group Inc UNH.N and
Cigna Corp CI.N dropped nearly 8% as Bernie Sanders, who backs
the elimination of private health insurance, strengthened his
position for the Democratic presidential nomination with a
victory in the Nevada caucuses. In a rare bright spot, Gilead Sciences Inc GILD.O , whose
antiviral remdesivir has shown promise in monkeys infected by a
related coronavirus, rose 2.8%.
Declining issues outnumbered advancers for a 6.76-to-1 ratio
on the NYSE and for a 7.63-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and 22 new
lows, while the Nasdaq recorded 17 new highs and 140 new lows.
Coronavirus timeline Image https://tmsnrt.rs/2T9wklM
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