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Fear dominated financial markets again on Thursday, and stocks fell sharply on worries about the fast-spreading virus outbreak. It’s the latest shudder in Wall Street’s wildest week in more than eight years.

Major U.S. indexes lost more than 3.5, and Treasury yields touched more record lows in their latest yo-yo move. The slide nearly wiped out the surge that stocks had ridden just a day earlier, in part on hopes that more aggressive moves by governments and central banks around the world could help contain the economic fallout.

The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 225.54 points, or 1.34 per cent, to 16,553.99.

Canada’s energy sector dropped 2.6 per cent and the financials and industrials sectors fell 2 per cent and 2.5 per cent, respectively.

These vicious swings are likely only to continue, as long as the number of new infections continues to accelerate, many analysts and professional investors say. The S&P 500 is on track to move more than 2 per cent a fourth straight day, the first time that would have happened since the summer of 2011.

The growing understanding that the spread of infections may not slow anytime soon is pulling sharply on markets. That pull has taken turns this week with the increasingly worldwide push that authorities are trying to give markets through spending plans and interest-rate cuts.

“It’s been a roller-coaster market in recent days for equity investors, and today we appear to be on the downward leg for that ride,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “What you need is time, and unfortunately that is still going to result in volatility.”

In China, where the number of new infections has been slowing drastically, Shanghai-traded stocks have rallied nearly 12 per cent since hitting a bottom on Feb. 3. They’re just 1.4 per cent below their highest level since the new virus began to spread late last year.

Factories in China are gradually reopening, and a return to a sense of normal life may even be on the horizon following swift and severe actions by the government to corral the virus.

But elsewhere in the world, the mood is much darker. There are about 17 times as many new infections outside China as in it, according to the World Health Organization. Widening outbreaks in South Korea, Italy and Iran are responsible for the majority of new infections.

In the U.S., the death toll climbed to 11 due to the virus. California declared a statewide emergency late Wednesday. Southwest Airlines on Thursday warned its investors that it’s seen a significant decline in demand in recent days and an increase in customers cancelling trips.

The Dow Jones Industrial Average fell 969.17 points, or 3.58%, to 26,121.69, the S&P 500 lost 105.98 points, or 3.39%, to 3,024.14 and the Nasdaq Composite dropped 279.49 points, or 3.1%, to 8,738.60.

Losses were widespread, and all 11 sectors that make up the S&P 500 index were down. Financial stocks had the sharpest losses, at 4.9 per cent. Energy stocks in the S&P 500 dropped to their lowest level since the market was emerging from the rubble of the financial crisis in March 2009.

“The Western world is now following some of China’s playbook, closing schools and declaring a state of emergency for example, but there is a sense that this is too little, too late,” said Chris Beauchamp, chief market analyst at IG.

It’s a sharp turnaround from earlier this year, when a resilient stock market kept climbing to new highs on the hopes that the virus may remain contained in China and be just a short-term challenge.

Just this week, the S&P 500 has gone from a jump of 4.6 per cent Monday to a loss of 2.8 per cent and back to a rise of 4.2 per cent. In normal times, a move of even 1 per cent would be notable. Those kinds of swings are reminiscent of August 2011, when Standard & Poor’s cut the U.S. government’s credit rating and the European debt crisis was raging.

Now that a growing list of companies are warning about how the virus is hitting their sales and profits, investors are left with a lot of uncertainty about just how much economic growth and corporate profits will be affected.

“We could probably drive a metaphorical truck between the upside and downside cases here,” said Jason Pride, chief investment officer for private wealth at Glenmede.

Asian stock markets started Thursday off higher, riding the wave of optimism and hope that sent the S&P 500 spurting up 4.2 per cent on Wednesday. U.S. congressional leaders reached a deal on a bipartisan $8.3 billion spending bill to battle the coronavirus outbreak, which the Senate passed Thursday, and the Bank of Canada followed up on the Federal Reserve’s surprise cut to interest rates the day before with its own.

Some economists expect the European Central Bank to make some kind of move before its meeting on March 12, and speculation is rising that the Swiss National Bank could follow shortly afterward. The Bank of England meets on March 26 on rates.

Health care stocks got a particularly big boost Wednesday after victories by Joe Biden in state primaries launched him into contender status for the Democratic presidential nomination with Bernie Sanders. Many investors see Sanders’ health care plan as damaging to the industry’s profits.

Japan’s Nikkei 225 rose 1.1 per cent, South Korea’s Kospi gained 1.3 per cent and stocks in Shanghai jumped 2 per cent.

But markets turned lower as trading moved west to Europe. The French CAC 40 fell 1.9 per cent, Germany’s DAX lost 1.5 per cent and the FTSE 100 in London dropped 1.6 per cent.

Several measures of fear in the market clenched tighter.

The yield on the 10-year Treasury sank to 0.92 per cent from 0.99 per cent late Wednesday. It earlier threatened to drop below 0.90 per cent for the first time in history. Shorter-term Treasury yields fell as traders increase bets for more rate cuts by the Federal Reserve to try to limit the economic damage. The two-year Treasury yield fell to 0.57 per cent from 0.62 per cent.

Gold climbed as investors piled into investments seen as safe. It rose $25.00 to settle at $1,668.00 per ounce.

Crude oil fell even though OPEC members proposed a deep cut of production to shore up prices. Oil has been sliding on worries that a global economy weakened by the virus will burn less fuel.

Benchmark U.S. crude lost 88 cents to settle at $45.90 per barrel. Brent crude, the international standard, fell $1.14 to $49.99 per barrel.

In other commodities trading, silver rose 15 cents to $17.39 per ounce, and copper fell a penny to $2.57 per pound. Natural gas lost 6 cents to $1.77 per 1,000 cubic feet, heating oil fell 4 cents to $1.49 per gallon and wholesale gasoline lost 3 cents to $1.52 per gallon.

The Associated Press