By Rodrigo Campos
NEW YORK (Reuters) - Coronavirus panic sent world stock markets tumbling again on Friday, with an index of global stocks setting its largest weekly fall since the 2008 global financial crisis, and over $5 trillion wiped from global market value this week.
U.S. stocks shaved most of the day's losses late in the New York session but only the Nasdaq eked out a positive close. The Dow lost nearly 3,600 points this week and the S&P 500 posted a double-digit weekly percentage loss for only the fifth time since 1940.
Yields on U.S. government bonds, widely seen as the world's most secure asset, ended the day near the fresh record lows. [US/]
Disruptions to international travel and supply chains, school closures and cancellations of major events have all blackened the outlook for a world economy that was already struggling with fallout from the U.S.-China trade war.
Hopes the epidemic, first detected in China in December, would be over swiftly and economic activity quickly return to normal have been shattered. Countries other than China now account for about three-quarters of new infections.
"The uncertainty hovering over the markets will only be alleviated when there is a sense that the worst is almost over," said Quincy Krosby, chief market strategist at Prudential Financial Inc. "Until then it is risk off."
The Dow Jones Industrial Average <.DJI> fell 357.28 points, or 1.39%, to 25,409.36, and the S&P 500 <.SPX> lost 24.54 points, or 0.82%, to 2,954.22. The Nasdaq Composite <.IXIC> added 0.89 points, or 0.01%, to 8,567.37.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 1.76% for a weekly loss over 10%, its second largest on record.
The over $5 trillion lost in market capitalization globally this week is roughly equivalent to Japan's yearly GDP, the third-largest in the world.
Japan's Nikkei futures <NKc1> lost 0.28%.
(Graphic - Coronavirus crashes global markets, https://fingfx.thomsonreuters.com/gfx/mkt/13/2642/2607/Pasted%20Image.jpg)
RATE CUTS PRICED IN
Federal Reserve chairman Jerome Powell said the central bank will act as appropriate to provide support to the U.S. economy.
Expectations the Fed will cut interest rates to cushion the blow are rising in money markets and Powell's remarks reinforced the sentiment. Fed funds futures <0#FF:> are now fully pricing in a rate cut next month, with the question only being how large it will be.
The European Central Bank historically lags the Fed but it is now seen cutting by another 10 basis points by June.
The yen's lustre shined, with the Japanese currency rising by the most for any week since mid-2016.
On Friday the yen <JPY=> strengthened 1.41% versus the greenback at 108.08 per dollar.
The dollar index <=USD> fell 0.332%, with the euro <EUR=> up 0.26% to $1.1027. Sterling <GBP=> was last trading at $1.2818, down 0.51% on the day.
The appeal of guaranteed income sent high-grade bonds rallying. U.S. yields - which move inversely to the price - plunged, with the benchmark 10-year note yield hitting a record low of 1.116%.
Benchmark 10-year notes <US10YT=RR> last rose 1-12/32 in price to yield 1.1551%, from 1.299% late on Thursday. The 30-year bond <US30YT=RR> last rose 2-17/32 in price to yield 1.6784%, from 1.783%.
Oil prices slumped again on fears of drooping demand.
U.S. crude <CLc1> fell 3.8% to $45.30 per barrel and Brent <LCOc1> was last at $50.50, down 3.22% on the day.
Palladium led a free fall in precious metals as coronavirus drove panic-stricken investors to liquidate assets across the board.
Spot gold <XAU=> dropped 3.5% to $1,584.74 an ounce after touching a 7-year high on Thursday. Palladium <XPD=> dropped 8.9% to $2,593.19 an ounce after hitting a record high on Thursday.
Among industrial metals, copper <CMCU3> rose 0.34% to $5,634.85 a tonne. Three-month aluminium on the London Metal Exchange <CMAL3> rose 0.68% to $1,701.50 a tonne.
(This story has been refiled to fix the word "too" in headline)
(Reporting by Rodrigo Campos; Additional reporting by Hideyuki Sano in Tokyo, Marc Jones in London, Medha Singh in Bengaluru, Kate Duguid in New York and Ross Kerber in Boston; Editing by Chris Reese and Alistair Bell)