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Investors Business Daily

Dow Plunges 1,200 Points As Stock Market Melts Down Again On Coronavirus Fears

The Dow Jones Industrial Average plunged nearly 1,200 points Thursday as selling ramped up into the close amid heightened coronavirus pandemic fears.

The Nasdaq crashed 4.6%, while the Dow Jones industrials and S&P 500 dove 4.4% each in the stock market today. Small caps tracked by the Russell 2000 fared slightly better, down 3.5%. Volume was sharply higher on both the Nasdaq and NYSE exchanges vs. Wednesday, according to early data.

Stocks started lower after the CDC confirmed the first U.S. coronavirus case of unknown origin in California, bringing the U.S. total to 60 confirmed cases. Selling intensified after California said it is monitoring 8,400 people for potential infections. Outside the U.S., cases in South Korea, Italy and Iran continued to rise.

The Dow Jones index is headed for a nearly 11% weekly loss, or 3,225 points for now, marking its biggest drop in years. It's also fallen sharply below its 40-week moving average. The S&P 500, down nearly 10% for the week, has undercut its long-term line. But the Nasdaq, which faces a 9.5% weekly loss, is holding above the 40-week line.

Ten Dow Jones stocks dived more than 4% each, including big-cap techs Apple, Microsoft and Intel. Apple, down nearly 5% in heavy trade, is now 14% off its high. it gapped below the 50-day line Monday. But the Leaderboard stock still holds a 26% gain from a 221.7 buy point of a flat base cleared in September.

Microsoft, also off more than 4% in volume, closed below its 50-day line for the first time in four months. The software giant warned current-quarter sales would miss its outlook as the coronavirus outbreak keeps spreading — joining Apple, HP and Mastercard with virus-related warnings.

Boeing, Disney, Exxon Mobil and Dow also shed more than 4% apiece. Of the Dow's 30 stocks, only 3M, up 2.3%, managed a gain.

Coronavirus-Fueled Winners

3M got a boost from Alpha Pro Tech, which surged 106% to a record high after announcing a huge spike in face mask orders. APT is ramping up production of its N-95 face mask amid heavy demand from the coronavirus outbreak. 3M also makes protective face masks.

Novavax, up 28% in fast trade, also scored virus-related gains. The clinical stage vaccine maker said it's ready to start animal testing for its Covid-19 vaccine candidates. Gilead Sciences, up nearly 6% early before reversing to a 2.7% loss, announced the start of phase 3 clinical studies for its coronavirus drug candidate.

Automakers, retail and oil stocks led the downside among IBD's 197 industry groups. Medical software, travel bookers and hotels were among the few groups bucking the sell-off.

Tesla Skids Further

Tesla skidded 13% in volume slightly higher than normal, as Tesla registrations slowed down sharply due to the spreading coronavirus. Shares are still up more than 60% this year.

Over in the IBD 50, Square led the handful of winners with a 3.6% gain. Shares jumped 10% after the digital payment processor's strong Q4 results late Wednesday, before paring its gain. Square also raised its 2020 guidance. A recent breakout past an 82.20 buy point in a cup-with-handle pattern failed this week, MarketSmith chart analysis shows. The stock fell more than 7% below the entry, triggering the loss-cutting sell rule.

Biggest IBD 50 losers included Texas Roadhouse and Lululemon, down more than 7% each.

The Innovator IBD 50 ETF, which focuses on growth stocks, shed 3.4% in today's stock market.

Follow Nancy Gondo on Twitter at @IBD_NGondo