US STOCKS-Wall Street selloff deepens on pandemic fears

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* Dow drops 1,000 points third time this week
* Defensive lead losses among sectors
* Mylan slumps after warning of financial hit from outbreak
* Nasdaq briefly turns positive in volatile session
* Indexes down: Dow 2.48%, S&P 1.92%, Nasdaq 1.13%

(Adds comment, details; updates prices)
By Medha Singh
Feb 28 (Reuters) - Wall Street plunged in a volatile trading
session heading into the weekend, extending a steep selloff from
last week as the fast-spreading coronavirus raised fears of a
global recession.
The three main stock indexes pared losses and the Nasdaq
briefly turned positive on gains in technology stocks including
Microsoft Corp MSFT.O and chipmakers Nvidia NVDA.O and
Qualcomm QCOM.O .
However, the Dow Jones Industrials slumped more than 1,000
points during the session and if the index closes below this
level, it would be its fifth 1,000-point decline in history and
the third this week.
As the world prepares for a likely pandemic, investors
rushed to safe assets, deepening an inversion of the U.S.
Treasury yield curve, a classic recession signal. US/
"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 three indexes closed more than 10% below their recent
record closing highs on Thursday and are on track for their
worst week since the 2008 global financial crisis.
At 11:53 a.m. ET, the Dow Jones Industrial Average .DJI
was down 638.24 points, or 2.48%, at 25,128.40, the S&P 500
.SPX was down 57.23 points, or 1.92%, at 2,921.53. The Nasdaq
Composite .IXIC was down 96.59 points, or 1.13%, at 8,469.89.
All the 11 S&P sectors were in the red with the utilities
.SPLRCU , consumer staples .SPLRCS and real estate .SPLRCR
and financial .SPSY sectors falling more than 3%.
While the magnitude of the economic damage from the
containment measures, which have crippled supply chains and hit
business investment, remained unclear, analysts have sharply
downgraded their outlook for growth and corporate earnings.
Traders are now pricing in an interest rate cut by the
Federal Reserve as soon as next month, but many have expressed
doubts about how this would mitigate the impact of the outbreak.
Among individual stocks, Mylan NV MYL.O dropped 8.3% after
the drugmaker cautioned a financial hit from the coronavirus
outbreak and warned of drug shortages in case of continued
spread of the virus. Declining issues outnumbered advancers for a 5.50-to-1 ratio
on the NYSE and for a 2.99-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 127 new
lows, while the Nasdaq recorded 14 new highs and 466 new lows.