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Wall Street suffers worst week since 2008 amid coronavirus and fears of recession

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Traders work during the closing bell at the New York Stock Exchange (NYSE) at Wall Street in New York City on March 18, 2020.
Traders work during the closing bell at the New York Stock Exchange (NYSE) at Wall Street in New York City on March 18, 2020.   -   Copyright  JOHANNES EISELE/AFP
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Stocks sank to their worst week since the financial crisis of 2008 as traders went into full retreat out of fear that the coronavirus will plunge the US and other major economies into deep recessions.

The Dow industrials dropped more than 900 points, extending their weekly loss to 17%.

The price of U.S. crude oil also took another nosedive as investors anticipate a sharp drop in demand for energy as manufacturing, travel and commerce grind nearly to a halt.

New York became on Friday the latest state to extend a mandate to nearly all workers stay home to limit the spread of the virus.

The action taken by New York Gov. Andrew Cuomo, coming just a day after California announced similar measures, is another sign that large swaths of the US economy are coming to a standstill.

Investors are weighing the likelihood that the global economy is entering a recession because of the massive shutdowns and layoffs caused by the outbreak against steps by central banks and governments to ease the economic pain.

Ultimately, investors say they need to see the number of new infections to stop accelerating for the market's volatile skid to ease.

"We just don't know what the next two weeks will bring," Paul Christopher, global market strategist at the Wells Fargo Investment Institute, told AP.

"Are we going to follow the same infection curve as other countries and the number infections will drastically accelerate? That's when the storm is going to come."

Members of President Donald Trump's economic team were convening on Friday to launch negotiations with Senate Republicans and Democrats racing to draft a $1 trillion-plus economic rescue package amid the coronavirus outbreak.

The rescue package is the biggest effort yet to shore up households and the U.S. economy as the pandemic and its nationwide shutdown hurtles the country toward a likely recession.

On Thursday, the European Central Bank launched a program to inject money into credit markets by purchasing up to 750 billion euros ($820 billion) in bonds.

The Bank of England cut its key interest rate to a record low of 0.1% and restarted its own program of money injections into the financial system.

Australia's central bank cut its benchmark lending rate to 0.25%.

Central banks in Taiwan, Indonesia and the Philippines also cut rates.

They are trying to reduce the impact of a global recession that forecasters say looks increasingly likely as the United States and other governments tighten travel controls, close businesses and tell consumers and travelers to stay home.

The U.S. Federal Reserve unveiled measures on Thursday to support money-market funds and the borrowing of dollars as investors in markets worldwide hurry to build up cash as insurance against falling asset prices.

Investors are jumpy due to uncertainty about the size and duration of the impact of the coronavirus outbreak and the spreading wave of business shutdowns meant to help contain it.

More than 10,000 people have died. There are more than 246,000 cases worldwide, including nearly 85,000 people who have recovered.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough, and those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems, and recovery could take six weeks in such cases.

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