The Dow Jones industrial average fell 603 points or 2%, wiping out January’s gains and launching the blue chips on their worst start since 2016. The Dow closed at 28,255. The Standard & Poor’s 500 index and Nasdaq composite closed down 1.77 and 1.59%, respectively.

Stocks were hit from several sides. Delta Air Lines and American Airlines joined United and a large group of European carriers in suspending all service to China, as demand for service plummets and officials scramble to contain the spread of the disease.

On Thursday, the World Health Organization declared a public health emergency, after declining to do so the previous week. The pneumonia-like virus has infected more than 9,900 people in China and killed 213 and is spreading. The national Centers for Disease Control and Prevention reported the first person-to-person transmission of the virus in the United States, as the husband of a woman who contracted the virus in Wuhan was diagnosed with the illness. The United Kingdom and Russia both reported their first cases Friday.

The deadly coronavirus presents a threat to the global economy, as it paralyzes China’s workforce and dampens its powerful manufacturing industry. It is forcing global firms with roots in the country to freeze operations and seek ways to reorient supply chains.

“There is a growing recognition that the coronavirus contagion is worsening, with more travel restrictions and the number of infected already exceeding the total infected by SARS,” said Kristina Hooper, chief global market strategist for Invesco.

From an economic perspective, the outbreak’s timing is especially punishing, dragging down growth prospects and taking a bite out of corporate earnings just when investors had hoped for a boost after the truce in the U.S.-China trade war. A Chicago report showing the weakest manufacturing in five years added to market woes on Friday.

The Dow and the S&P both finished January in negative territory. The Nasdaq is still up a comfortable 2% on the year, thanks to the big technology stocks that have propelled the last several years of the bull market.

The big U.S. energy companies, already hit by low oil prices due to oversupply, were the biggest drags on the Dow Jones industrial average Friday. Exxon Mobil and Chevron finished down 4% each, hitting 52-week lows after reporting disappointing earnings on Friday. Oil prices are expected to decline further due to a slowdown in demand from the economic implications of the coronavirus.

“The market’s worry is all about consumer demand,” said Scott Wren, global equity strategist at Wells Fargo Investment Institute. “If people stay home and don’t go out and spend money, economic growth will really get hit.”

China’s markets are closed for the extended holiday, but Hong Kong’s Hang Seng Index fell 0.5%. Europe’s benchmark Stoxx 600 index closed at a loss of 1%. Britain’s FTSE 100 was off 1.3% on the long-awaited official day of Brexit.

The tumult ushered U.S. markets’ worst week of trading in 2020, a disappointing end to what otherwise had been a strong January that brought the Dow Jones industrial average within striking distance of 30,000. Ten of 11 S&P sectors finished in the red, with energy the biggest drag.

Growth in the euro zone softened significantly last year, fresh economic data showed Friday, expanding just 1.2% in 2019, its lowest level in six years. Experts say the slowdown is tied to a weakening manufacturing sector and strife in the automobile industry, further complicated by global trade tensions.

U.S. economic growth dropped to its slowest pace since 2016 in 2019, the Commerce Department reported Thursday. The slowdown defies claims from the Trump administration that stimulus from the 2017 tax bill, which yielded big cuts for corporations and households, would lead to 3% GDP growth. Despite a 2.1% rise in fourth-quarter GDP, growth for the full year was 2.3%, compared with 2.9% in 2018 and 2.4% in 2017.

Consumer spending rose slightly, at 0.3%, in December, the Commerce Department reported Friday, while incomes inched up 0.2% and inflation picked up 0.3%.

“Consumers are not as positive as they were in the middle of 2019 and are sitting on their wallets as the year came to a close, which draws a great big question mark over the 2020 economic outlook,” Chris Rupkey, chief financial economist at MUFG Union Bank wrote in a note to investors Friday. “Business investment spending on equipment and structures are declining which doesn’t suggest companies think consumer spending will be all that red hot in 2020 and this is before the China virus has spread … generating uncertainty that will keep the consumer at home instead of taking those trips to the mall that the economy sorely needs to keep growing.”

Goldman Sachs in a research note on Thursday predicted the coronavirus will somewhat stifle U.S. economic growth in the first quarter. The investment firm said that a bigger outbreak in the United States could pose a significant risk to consumer spending and business activity. But in an interview with Fox Business on Thursday, Commerce Secretary Wilbur Ross claimed that the lethal virus could “help” the U.S. economy as businesses seek alternatives to China because of the health risks.

“I think it will help accelerate the return of jobs to North America,” Ross said.

Experts have been exploring the 2003 SARS outbreak to weigh the potential economic impact of the coronavirus. A 2004 study from The Brookings Institution, Korea University and the Australian National University estimated that the outbreak delivered a $40 billion hit to the global economy; that would amount to about $56 billion today, adjusting for inflation.

Starbucks earlier this week shuttered more than 2,000 locations – more than half its stores in the country – and McDonald’s and KFC have also announced closures. Google closed its five offices in mainland China, Hong Kong and self-governing Taiwan. The airline industry has been hit particularly hard, and on Friday Delta and American Airlines joined a large group of European airlines in suspending all flights to China. Delta’s shares sank 2% and American Airlines’ shares fell more than 3%.

Technology giants Apple, Microsoft and Amazon delivered blockbuster earnings beats this week. But their success was not enough to rescue markets from Friday’s plunge over fears that the coronavirus was rapidly spreading across the planet.

Moody’s analysts predict the virus will eat into Apple’s profits in the first quarter as the company freezes operations and looks to supply chain alternatives. Apple’s shares fell 4.4% on the day. Microsoft closed down 1.5%. Amazon.com was up 7.4%. Washington Post owner Jeff Bezos is the founder and chief executive of Amazon.

“Though its current offerings appear to be popular in China, if the epidemic endures and causes a sustained weakening of economic activity, there could be material impacts to Apple’s performance over an extended period,” Moody’s analysts wrote in a report Thursday. “Apple’s large product-centric and consumer oriented sales make it susceptible to sharp swings in demand.”

The virus scare has brought volatility back to the markets. Stocks moved 1% last Monday for the first time since October and then again on Friday. “It’s not a free-for-all, and not a panic,” said Howard Silverblatt of S&P Dow Jones Industries. “A pullback was expected. The virus has been the trigger. The question is how long does the virus scare continue and how much it impacts global supply chains.”

Ivan Feinseth of Tigress Financial partners sees the virus scare as a potential opportunity for investors.

“History has shown that any selloffs in stocks driven by health scares have been short-lived and did little to change the upward ascent of stocks in the past,” Feinseth said. “The S&P 500 gained 31% in 1997 even in the face of a combination of the Avian flu epidemic, the Asian financial crisis, the Russian sovereign debt default, and the collapse of Long-Term Capital Management.”

But there are signs that the outlook for 2020 could be less robust than in the past three years. Caterpillar, a bellwether for the global economy, beat earnings estimates but reported an 8% decline in revenue year-over-year, citing “global economic uncertainty.” Its shares were down 3%.

“We expect continued global economic uncertainty to pressure sales to users in 2020 and cause dealers to further reduce inventories,” Chief Executive Jim Umpleby said in a statement.

Kobsak Pootrakool, deputy secretary-general to the prime minister for political affairs, said short term measures would include reduction of excise on jet fuel, tax cuts for local tourism seminars organised by the private sector, postponement of corporate tax payment for companies in the tourism sector and soft loans for tourism operators.

The measures will be proposed to the Cabinet on February 4.

The tourism sector contributes 20 per cent of gross domestic product and employs more than 10 million.

The Transport Ministry proposed to the meeting a cut in plane landing fee.

Meanwhile, long term measures to be implemented in May, are the establishment of a committee to ensure ‘ease of travelling’. The committee will focus on upgrading tourism sector and solve problems for travellers.

Prime Minister Prayut Chan-o-cha, who chaired a meeting of the economic ministers on Friday (January 31), will approve setup of the committee soon.

Tourism Authority of Thailand Governor Yutthasak Supasorn said the TAT had yet to revise the arrival target of around 41.8 million with an estimated total revenue of Bt2.22 trillion this year.

He added that after the situation returns to normal, the TAT will promote travel by Thais and woo tourists from other countries to offset the decline in  arrivals from China.

The decline in arrivals from China is estimated to cost the tourism sector more than Bt100 billion this year.

The sector will be hit hard in the first quarter of the year, with many holidays on the chinese calendar, before the situation improves in the mid of the year.

TMB Analytics estimated that the number of foreign tourist arrivals in Thailand this year will fall to 38.7 million from 40.8 million in its previous forecast.

The revenue of the tourism and related sectors is expected to decline by over Bt100 billion, of which over Bt70 billion loss will be seen in the hotel, restaurant and retail segments.

By sector, the hotel business is expected to face revenue loss of Bt28.4 billion, retail Bt28.4 billion, and restaurants Bt18.9 billion. 7,500 hotels  are expected to be affected, especially those located in Bangkok, Phuket, Chonburi, Krabi, Surat Thani, Chiang Mai and Pang-Nga. The seven provinces, popular with Chinese tourists, have a total of 4,763 properties, accounting for 65 per cent of all hotels in Thailand.

The centre said on Friday in a statement that the committee has two option if it determines there is an urgent need to cut the rate.

The first is to cut it by 25 basis point this month and another 25 in March. The second is to trim away 0.5 per cent all at once.

The centre noted a high risk that the global economy could slow further and said Thailand would suffer despite the baht now showing signs of depreciating.

The baht was at Bt31.2 to the US dollar as of Thursday (January 30), a decline from Bt29.97 at the end of 2019, which has eased pressure on the export sector.

However, China’s economy is this year expected to expand only 5.5-5.9 per cent, which will hurt countries like Thailand that rely heavily on exports there.

The centre suspects the baht’s weakening might not be enough to offset the impact from China’s faltering economy.

Other crucial factors are chronic drought afflicting farm production and another delay in disbursing the budget for fiscal 2020.

Its report on Economic and Monetary Conditions for December and the fourth quarter of 2019 said the value of merchandise exports, manufacturing production, private investment indicators and public spending contracted at a slower rate, while private consumption indicators expanded at a pace close to that of the previous month.

Tourism growth was also slower despite the adverse effects of the tour boat tragedy in Phuket abating.

Headline inflation edged up from the previous month, mainly due to slower contraction in energy prices. The seasonally adjusted unemployment rate was unchanged, whereas employment rose in the non-agricultural sectors.

The current account continued to record a surplus. The capital and financial accounts posted deficits from both asset and liability positions.

Details are as follows:

The value of merchandise exports contracted by 1.7 per cent from the same period last year. This was the lower rate from 7.7 per cent in the previous month because –

•    Exports of petroleum-related products contracted at a lower rate due to some oil refineries resuming normal operations after temporary shutdowns, coupled with an increase in global crude oil prices.

•    Exports of electrical appliances and hard disk drive turned into expansion thanks to the relocation of production base to Thailand in the previous periods.

•    Exports of other electronic parts expanded in line with a clearer recovery sign of the electronic cycle.

•    The temporary effect of Chinese New Year arriving earlier than last year.

As a consequence of improved merchandise exports, manufacturing production contracted at a slower pace.

Private investment indicators contracted less than the same period last year. Investment in machinery and equipment did so since imports of capital goods began rising.

However, domestic machinery sales and the number of newly registered motor vehicles continued to fall significantly.

Meanwhile, investment in construction began to grow from both permitted construction areas and construction material sales.

Private consumption indicators expanded at a pace close to that of the previous month. Spending on services accelerated due to benefits from the government’s tourism stimuli and the longer holidays in December.

Meanwhile, spending on semi-durable goods turned positive mainly in imported garments. But spending on non-durable goods contracted, partly due to government welfare card benefits.

Spending on durable goods continued to contract in vehicle sales, in line with softening non-farm income and consumer confidence, together with financial institutions’ tightening of credit standards for consumer loans after credit quality deteriorated.

The value of merchandise imports was up by 1.8 per cent from the same period last year, improving in almost all categories, particularly turbo-jets and parts, telecommunication equipment, fuel and garments and jewellery and a rise in the global crude oil price.

Foreign tourist arrivals expanded by 2.5 per cent, attributable to visa-on-arrival fees being waived, which encouraged more visitors from China, India and Taiwan, together with rising interest from Laos, Japan, South Korea and Russia.

Public spending excluding transfers contracted less in current expenditures. Capital expenditures contracted at a higher rate. Current spending on goods and services and the government’s capital spending were affected by delays in approving the fiscal 2020 budget. However, state enterprises’ capital spending accelerated as the government expedited disbursement.

UTCC president Thanavath Phonvichai said this week that the centre had evaluated the effects on the Thai economy of the coronavirus outbreak — which affects the tourism sector and also the demand for Thai goods — the ongoing drought, the PM2.5 dust crisis and the delay in the 2020 budget disbursement.

The centre, however, has not yet revised down its forecast for Thai economic growth this year from 2.8 per cent, as it was waiting to see if the government’s current and upcoming remedial measures could successfully ameliorate the problems.

The centre estimated that in case the coronavirus outbreak could be contained by March, the number of tourist arrivals in Thailand would be lower by 2.41 million, of which 1.84 million would be Chinese. This will cost the Thai economy about Bt117.3 billion.

If the epidemic prolongs till May, it will cost Thailand Bt189.2 billion.The outbreak in China is predicted to pull China’s economic growth this year below the current forecast of 5.9 per cent. Its slowing economy will result in a decline in the global economy, which will affect the demand of Thai goods accordingly.

The centre estimated that if China can control the virus spread by March, the impact on Thai exports would be limited to Bt15.5 billion. If China can control the situation only in May, the impact on Thai goods would be much higher at Bt36.7 billion.

In the case of budget disbursement, which should have been released last October, if the disbursement begins in April, will cost the gross domestic product (GDP) Bt77.5 billion. If the disbursement starts as late as June, it will hurt GDP by around Bt167 billion.

The PM2.5 dust pollution, if not at a serious level for more than two weeks, will affect GDP by Bt3.8 billion. If the situation prevails for not more than one month, it will cost Bt6.2 billion, according to UTCC’s estimates.

Egat deputy governor Tawatchai Jakpaisal said this week the new shipment would be fed into its three power plants – Bangpakong, Wangnoi and South Bangkok.

The state enterprise is determining the LNG volume each will use, expected to be not more than one million tonnes this year.

He added that Egat expected to import the new lot in the second half of the year.

Egat imported 65,000 tonnes in December and will import the same amount in April.

Last year’s growth was the weakest since Trump took office, according to Commerce Department data released Thursday, as Trump’s escalating trade war with China triggered a major pullback in business spending and investment. From April through December, business investment contracted as corporate leaders preferred to sit on cash or return it to investors instead of using it to build new factories or buy equipment.

The falloff in growth – from 2.9 percent in 2018 to a more typical pace in 2019 – suggests that the stimulus from the tax cuts is wearing off and the trade war is cancelling out many of its benefits. The tax cuts came with a hefty price tag that many Republicans hoped would be offset by stronger growth for years.

But last year’s growth also shows the economy’s resilience, as it rebounded from recession fears in August to close out the year on solid footing thanks largely to American consumers.

Economists predict the U.S. economy will cool further in 2020, with growth coming in around 2 percent, but few anticipate a recession. The big question mark is whether businesses will start spending again now that Trump has paused his trade battle with China.

If companies begin deploying more cash and investing, growth could pick up and return closer to 2018′s levels. But an increasing number of forecasters say growth could slide further thanks to headline-making head winds, such as the production stoppage at Boeing and the fast-spreading coronavirus in China.

“You can see the sugar high in 2018 in consumption and business investment that has gone away in 2019,” said Constance Hunter, chief economist at KPMG. “We don’t see a corporate investment rebound in 2020. It’s going to be a very sluggish year.”

Trump and his fellow Republicans have portrayed the U.S. economy’s performance as “unprecedented,” “historic” and in the “fast lane” after the GOP tax cuts. Many economists paint a different picture, though, describing the economy as slightly above potential.

The president’s top economic adviser predicted growth would top 3 percent for at least two quarters this year.

“I think we’ll see a big pickup in growth in the spring, if not the winter,” Larry Kudlow, head of the National Economic Council, said on Fox Business. “It’s a fundamentally healthy economy,” he said, touting the 3.5 percent unemployment rate and “tremendous wage gains.”

Last year, Kudlow offered a similar prediction that did not come to fruition. Growth was 2.1 percent in the final three months of the year, slightly better than many economists expected but below this expansion’s 2.3 percent average.

American consumers continue to drive the U.S. economy. Numerous polls and surveys show consumer confidence remains high. Americans believe that it is easy to get a job and that their incomes are likely to stay the same or improve in the coming months.

Government spending increased markedly during the Trump presidency, boosting economic growth. The deficit – or gap between spending and tax revenue – neared $1 trillion in 2019, an unprecedented level during good economic times when there is not an all-consuming war effort underway. Trump’s tax cuts and additional funding for the military and domestic programs have pushed the gap wider.

Despite the additional government stimulus, Trump has yet to achieve a year of the 3 percent growth he promised before taking office.

Trump repeatedly has blamed the Federal Reserve for the shortfall, but most economists say Trump’s escalating trade war and economic weakness abroad dragged down growth last year. The ongoing fallout at Boeing after the two 737 Max plane crashes and the General Motors strike that idled production at GM factories for much of October also dampened growth. Boeing is usually the largest U.S. exporter, but orders dried up after the tragedies.

“The United States is by far the strongest economic power in the world,” Trump said in a speech last week at the World Economic Forum in Davos, Switzerland. “It’s despite the fact that the Fed has raised rates too fast and lowered them too slowly.”

Trump frequently boasts about his stewardship over the economy. The growth during his tenure has exceeded the average in the first and second terms of Presidents George W. Bush and Barack Obama, but it is not unprecedented. Presidents Ronald Reagan and Bill Clinton oversaw faster expansions.

Economists caution against giving presidents too much credit for the economy, but surveys show voters often feel otherwise. Late last year, a Washington Post-ABC News poll found 44 percent of Americans said the economy had improved under Trump, and among that group, nearly 4 in 5 said he deserves at least a good amount of the credit.

When the president cites the economy’s strength, he often references stock market gains. Last year, the widely watched Standard & Poor’s 500-stock index soared nearly 29 percent, helping boost the fortunes of the roughly half of Americans who have some money in equities. But many economists note a disconnect between a surging stock market and a slowing, unspectacular economy.

Business confidence plummeted over the summer as Trump escalated his trade war with China and threatened to hit Mexico with extensive tariffs. Business investment shrank for three consecutive quarters last year to end 2019.

“I don’t think it’s within the ability of this president to really relieve uncertainty all that much,” said Vincent Reinhart, chief economist at investment firm Mellon. “Immediately after completing the Phase One trade deal with China, the president rattled the cage by threatening Europe with auto tariffs.”

Trump’s tax cuts that took effect in 2018 gave businesses the biggest reduction in their tax bills in U.S. history. The vast majority of Americans also paid less in taxes. But most economists say the cuts’ benefits were heavily curtailed by Trump’s trade war.

“The tax cuts likely did provide some boost to consumer spending, but that boost was temporary. Any benefits have been overshadowed by the headwinds come from trade policy uncertainty,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank.

Trump had said the tax cuts would lure factories back to the United States, but business investment in structures like warehouses and buildings fell more than 10 percent last year.

Only investment in intellectual property and residential housing rose. For all the insults Trump lobs at the Fed, Reinhart, the economist at Mellon, points out that spending on housing and home construction went up in the second half of the year after the central bank cut interest rates. If the Fed had not acted, growth would likely have been even slower.

Job growth is expected to cool further this year as businesses struggle to find workers with the skills they need. Typically wages would surge in such a tight labor market, but earnings growth actually slowed slightly last year. For now, many Americans say it is still easy to find a job, but there are early signs companies are taking down job postings and demand has started to decline.

Labor Department data show no increase in corporate layoffs through November, though headwinds loom — this week, industrial heavyweight 3M announced it would cut about 1,500 jobs worldwide, and key Boeing suppliers have announced cuts as well. The manufacturing sector was in a recession in 2019, but that pain has not spread to the service sector.

“With the economy as stable as it is, it would take a very large shock indeed to materially alter the economy’s basic trajectory,” said Eric Winograd, a senior economist at AllianceBernstein, in a note to clients.

The Dow Jones Industrial Average erased its advance for the year as the Centers for Disease Control and Prevention reported the first case of human-to-human transmission of the deadly virus in the U.S. United Parcel Service Inc., seen as a barometer of economic growth, tumbled after its profit outlook fell short of analyst estimates. Facebook and Verizon Communications also declined on results that underwhelmed investors.

A key slice of the Treasury yield curve inverted for the first time since October, which may be a signal that traders are concerned about policymakers’ ability to counter headwinds as the coronavirus threatens to disrupt global growth. Federal Reserve Chairman Jerome Powell said Wednesday that the viral outbreak will likely hit the Chinese economy and could spill wider, but it was too early to judge what impact it would have on the U.S.

“The market maybe doesn’t really know how to process the impact of this particular event,” Kathryn Kaminski, chief research strategist at AlphaSimplex Group, said by phone. “People may be moving on headlines or there may also be general concern about not being sure what this means.”

Global corporations are grappling with the rapidly spreading of the coronavirus that’s threatening a key growth market. Tesla Inc. expects a production delay in China, McDonald’s Corp. and Starbucks Corp. closed thousands of stores in the country while Apple Inc. is preparing for supply-chain disruptions.

Some other corporate highlights:

– Carnival Corp. plunged as a cruise ship owned by the company was blocked from leaving an Italian port after a passenger showed symptoms that raised concerns about a possible case of coronavirus.

– Microsoft Corp. rallied as its sales beat analysts’ projections by more than $1 billion.

– Tesla soared after reporting record revenue that beat estimates.

– Coca-Cola Co. climbed on better-than-expected revenue growth.

–Later Thursday, Amazon.com Inc., Visa Inc. and United States Steel Corp. are due to report their results.

Elsewhere, China’s offshore yuan briefly weakened past 7 for the first time this year. The pound jumped just before the Bank of England surprised the market by voting 7-2 to keep its key rate unchanged. Oil slumped as concern over the coronavirus outbreak prompted OPEC to consider an emergency meeting.

Here are the main moves in markets:

Stocks:

– The S&P 500 fell 0.8% as of 12:48 p.m. New York time.

– The Stoxx Europe 600 Index decreased 1%.

-The MSCI Emerging Market Index sank 2.7%.

Currencies:

– The Bloomberg Dollar Spot Index fell 0.1%.

– The euro gained 0.2% to $1.1032.

– The Japanese yen appreciated 0.3% to 108.67 per dollar.

Bonds:

– The yield on 10-year Treasuries declined four basis points to 1.55%.

– Germany’s 10-year yield decreased three basis points to -0.41%.

– Britain’s 10-year yield advanced three basis points to 0.542%.

Commodities:

– The Bloomberg Commodity Index decreased 1%.

– West Texas Intermediate crude fell 2.5% to $51.98 a barrel.

– Gold increased 0.8% to $1,588.20 an ounce.

Algerian Energy Minister Mohamed Arkab said the producer group’s meeting scheduled for March is likely to be moved to February, the Algerie Presse Service reported. A decision may be taken “in the coming days,” he said. He currently holds the rotating post of OPEC President, giving him the authority to convene emergency meetings in consultation with the Secretary-General and other members.

One delegate from an OPEC member said privately it could happen as soon as next week, and another floated mid-February as a date. Still, several delegates said they were unaware of discussions to bring the March 5-6 meeting forward.

There’s good reason to be skeptical about the prospective change of dates. If the group convenes an emergency meeting without announcing new measures, the disappointment among traders could push prices even lower. It already unveiled deeper production cuts just over a month ago, and as these are put into effect, Saudi Arabia — which has borne the greatest burden in reducing supply – has slashed output to the lowest since 2014.

Any meeting would probably include non-members such as Russia, as the latest production targets have been set in concert with those allies. One delegate said the availability of Russian Energy Minister Alexander Novak would be a factor in deciding whether an early meeting could be called. Novak’s schedule has been an obstacle to meetings in the past, and he is due to participate in a Russian Investment Forum from Feb. 12 to 14 in the coastal resort of Sochi.

The March 5-6 meeting is for OPEC+, and they’re due to discuss the future of oil-production cuts that expire at the end of March.

The outbreak of the pneumonia-like coronavirus has left 7,800 people infected and 170 dead since the first case was reported on Dec. 30 in Wuhan, the capital of China’s Hubei province. As airlines across the globe suspend flights to China, oil prices have slumped, adding to the pressure on OPEC to extend or deepen the group’s oil-production cuts.

Brent crude has dropped more than 10% this month even after the U.S. killed a key Iranian general and Libya’s oil production was cut to near zero following a blockade of the nation’s ports that virtually halted exports. Saudi Arabia has said it’s “closely monitoring” the effect of the virus on the oil market.