US STOCKS-Wall Street drops over 3% on virus fears, travel shares slammed

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* Shares of airlines, cruise lines lead declines
* Bank stocks track a fall in U.S. Treasury yields
* Tech firms ask Seattle employees to work from home
* Indexes down: Dow 3.58%, S&P 3.39%, Nasdaq 3.1%

(Updates to close of U.S. market)
By Lewis Krauskopf
March 5 (Reuters) - U.S. stocks tumbled on Thursday, with
shares of banks and travel companies taking a beating, as a new
wave of fear about the spread of the coronavirus and its
economic impact gripped investors just one day after election
results powered a rally.
The major indexes fell over 3%. On Wednesday the market
tallied huge gains following moderate Joe Biden's success in the
Super Tuesday primaries for the Democratic presidential
nomination.
The coronavirus has led to more than 3,300 deaths worldwide.
In the United States, new cases of the
vast-spreading virus were reported on Thursday around New York
and in San Francisco. In the latest developments, Alphabet Inc's GOOGL.O Google
joined other big tech firms in recommending employees in the
Seattle area work from home. “There's no way to put a framework around this, there's no
way to model it, because you just don't know," said Carol
Schleif, deputy chief investment officer at Abbot Downing
in Minneapolis. "The market is clearly trading on emotion today
and not fundamentals because they can't peg where the
fundamentals are.”
The Dow Jones Industrial Average .DJI fell 969.58 points,
or 3.58%, to 26,121.28, the S&P 500 .SPX lost 106.18 points,
or 3.39%, to 3,023.94 and the Nasdaq Composite .IXIC dropped
279.49 points, or 3.1%, to 8,738.60.
The benchmark S&P 500 ended down more than 10% from its Feb.
19 closing high, after last week logging its biggest weekly
percentage decline since October 2008.
“People are trying to test out a bottom, trying to decide
was last Friday the bottom, at least in the near term, for this
move or is there more downside ahead,” said Sam Stovall, chief
investment strategist at CFRA Research.
The financial sector dropped 4.9% as the continued fall in
Treasury yields weighed on rate-sensitive bank shares. The yield
on the 10-year Treasury note US10YT=RR fell to 0.91%.
Shares of JPMorgan Chase JPM.N dropped 4.9% and Bank of
America Corp BAC.N slid 5.1%.
All 11 major S&P 500 sectors ended negative, but defensive
sectors, such as utilities .SPLRCU and consumer staples
.SPLRCS , fell less than the overall market.
The CBOE Volatility index .VIX , Wall Street's fear gauge,
jumped 7.62 points to 39.61.
Shares of companies in the travel and leisure industry were
punished. The S&P 500 airline index .SPLRCAIR skidded 8.2%,
including a 13.4% fall for American Airlines Group Inc AAL.O .
The coronavirus epidemic could rob passenger airlines of up
to $113 billion in revenue this year, an industry body warned.
Shares of cruise operators tumbled after the Grand Princess
ocean liner, owned by Carnival Corp CCL.N , was barred from
returning to its home port of San Francisco on coronavirus fears
after at least 20 people aboard fell ill. Carnival shares
dropped 14.1%, while Royal Caribbean Cruises RCL.N fell 16.3%.
Data showed that the number of Americans filing for
unemployment benefits fell last week, suggesting the labor
market was on solid footing despite the coronavirus outbreak,
with investors casting an eye toward Friday's U.S. employment
report for February. Declining issues outnumbered advancing ones on the NYSE by a
5.90-to-1 ratio; on Nasdaq, a 4.76-to-1 ratio favored decliners.
The S&P 500 posted eight new 52-week highs and 79 new lows;
the Nasdaq Composite recorded 25 new highs and 357 new lows.
About 12 billion shares changed hands in U.S. exchanges,
above the 10.2 billion daily average over the last 20 sessions.