(New throughout, updates prices and market activity to U.S.
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* U.S. stocks slide almost 5%, halting Tuesday's rally
* BoE announces surprise 50 bps cut to tackle coronavirus
shock
* Oil falls after Saudi Aramco announces more production
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Herbert Lash
NEW YORK, March 11 (Reuters) - The dollar weakened and the
Dow Jones industrials entered bear market territory on Wednesday
on mounting worries about the global economy after world health
officials declared a coronavirus pandemic and Reuters reported a
White House gag order on top-level U.S. meetings on the
outbreak.
Risk assets tumbled throughout the day, erasing more value
from global stock markets that had already lost $8.1 trillion by
Tuesday. Losses accelerated late in the session as the number of
coronavirus cases increased and the United States weighed limits
on travelers from Europe. The World Health Organization's decision to label the
outbreak a pandemic came as Britain and Italy announced
multi-billion-dollar war chests to fight the disease.
Already skittish investors awaiting details on U.S. measures
were unnerved by news that the White House ordered federal
health officials to treat dozens of virus-related meetings as
classified. Government experts were among people without security
clearance who were excluded from interagency meetings that
restricted information and hampered the U.S. response to the
contagion, four Trump administration officials told Reuters.
The WHO pandemic classification added to uncertainty in the
market about the global economy. For the first time since the
2008 financial crisis, the Dow entered bear market territory,
defined as a 20% decline from a recent peak. The S&P 500 and
Nasdaq composite slid almost 6% at one point, also entering bear
territory on an intraday basis although those losses were pared.
Kim Forrest, chief investment officer at Bokeh Capital
Partners in Pittsburgh, said the classification pushed investors
over the edge.
"We woke up really worried about it. There's a wider spread,
the numbers are growing," she said. "I don't think anyone at
this point knows the real scope of this."
Emotions drove the sell-off amid a negative backdrop of
another emergency rate cut by a major central bank, the Bank of
England, said Sal Arnuk, partner and co-founder of Themis
Trading in Chatham, New Jersey. He said sentiment soured further
on news the White House has classified coronavirus meeting
information.
"If you feel the need to embargo information, a lot of
people don't like that, because that makes you think they're
concerned that the numbers are getting increasingly worse, so
bad that they feel they need to shield the American public from
that information," Arnuk said.
The Dow Jones Industrial Average .DJI fell 1,464.94
points, or 5.86%, to 23,553.22. The S&P 500 .SPX lost 140.85
points, or 4.89%, to 2,741.38 and the Nasdaq Composite .IXIC
dropped 392.20 points, or 4.7%, to 7,952.05.
Earlier in Europe, Tuesday's strong stock rally petered out.
The BofE rate cut had investors pondering how much monetary and
fiscal stimulus can dampen the epidemic's economic toll.
A gauge of long-term euro zone inflation expectations
dropped to another record low. Analysts said this suggested
investors were positioning for deflation risks. Britain announced a $39 billion war chest to soften the
impact of the coronavirus while Italy, the hardest hit country
outside of China, said it might further tighten already
draconian curbs.
European shares closed at a 14-month low as the benchmark
STOXX 600 .STOXX closed down 0.7%. MSCI's gauge of stocks
across the globe .MIWD00000PUS shed 3.64%, close to bear
territory.
Yields on U.S. Treasury debt rose in choppy trading despite
the heavy stock losses. The benchmark 10-year note US10YT=RR
yielded 0.8313%.
The escalating coronavirus outbreak also has given the
Federal Reserve a tough mission of trying to judge its potential
economic impact in the absence of reliable data. Economic stimulus will take time, while in the interim the
virus will spread further and more businesses suspend their
financial guidance, said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia.
Uncertainty has ramped up with no sign of abating, he said.
"The volatility due to the virus and the response to the
virus is at very severe levels. I don't see it really calming
down until our arms are around the number of people who are
affected in the U.S.," he said.
More than 121,500 people have been infected globally and
4,383 have died, according to a Reuters tally of government
announcements. The dollar resumed its decline against the safe-haven
Japanese yen and Swiss franc and gold rebounded, but was well
off the $1,700 level it briefly hit Monday.
Sterling initially fell as much as 0.4% against the dollar
and 1.2% against the euro after the BoE cut its benchmark rate
by 50 basis points, to 0.25%.
The Japanese yen strengthened 1.00% versus the greenback at
104.61 per dollar.
Benchmark U.S. 10-year Treasury yields US10T=RR rose 5
basis points to yield 0.804%, more than double Monday's record
low yield of 0.3180%.0.8711
German government bond yields rose DE10YT=RR after the BoE
cut supported sentiment, while Italian yields IT10YT=RR --
which had shot up on worries the country with Europe's worst
outbreak of the virus is sliding into a recession -- tumbled as
much as 20 basis points as bets grew on ECB stimulus.
Oil prices fell about 4%, sinking into the close of trading
on renewed weakness in the stock market and as Saudi Arabia and
the United Arab Emirates announced plans to escalate the
burgeoning price war.
Brent crude LCOc1 fell $1.43 to $35.79 a barrel, while
U.S. West Texas Intermediate (WTI) crude CLc1 fell $1.38 to
settle at $32.98 a barrel.
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Markets hit hard by coronavirus worries https://tmsnrt.rs/3cm1zTi
Volatility is back on Wall Street https://tmsnrt.rs/2TGkMaX
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