Dow is slated for a 700-point drop as market’s wild week resumes

Stock futures pointed to further declines Friday morning as Wall Street nears the end of a turbulent trading week.

Dow Jones Industrial Average indicated an implied drop of 721 points at Friday’s open. S&P 500 futures and Nasdaq-100 futures also pointed to steep losses for the two major benchmarks.

Meanwhile, the benchmark 10-year Treasury yield tumbled to below 0.7% for the first time ever, as investors continued to seek safer assets amid fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. Another haven asset gold is on track for its best week since 2008.


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Investors will monitor a key jobs report at 8:30 am ET for signs of any negative impact on the labor market from the coronavirus. The U.S. economy is expected to have added 175,000 jobs in February, down from 225,000 in January.

The premarket moves came amid a roller-coaster trading week on Wall Street, which saw the 30-stock Dow swing 1,000 points or higher twice within three days earlier this week. Friday’s declines extended a deep rout for stocks, adding to a 969-point loss for the Dow in the previous session.

“The magnitude of the selloff in the S&P 500 so far has further to go,” Binky Chadha, Deutsche Bank’s chief equity strategist, said in a note. “In terms of duration, just two weeks in, it is much too early to declare this episode as being done.”

Treasury yields saw sharp declines this week after the Federal Reserve announced an unexpected 50 basis points cut from its benchmark interest rate. It was the central bank’s first such emergency move since the financial crisis more than a decade ago.

“Bond King” and DoubleLine Capital CEO Jeffrey Gundlach told CNBC on Thursday that he believes the Fed panicked in cutting rates earlier this week.


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“If we look at history, once the Fed does a panic, intermeeting rate cut, particularly when it’s 50 basis points … they typically cut pretty quickly again,” Gundlach said. “I’m in the camp that the Fed is going to cut rates again, perhaps even in two weeks” during its regularly scheduled meeting.

The Dow posted its second-biggest point gain on Wednesday as major wins from former Vice President Joe Biden during Super Tuesday sparked a relief rally, especially in the health-care sector. However, these sharp gains were erased quickly as coronavirus fears continued to grip Wall Street.

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