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Trader Peter Tuchman works on the floor of the New York Stock Exchange Thursday, Feb. 27.

Craig Ruttle/The Associated Press

Canada’s benchmark Toronto stock index was down about 2 per cent, heading for its fifth day of losses, before operator TMX Group Ltd. experienced its second technical glitch in less than two years on Thursday, resulting in the shut-down of trading across three local bourses nearly two hours ahead of the scheduled closing.

Trading was initially halted on the TSX as well as the TSX Alpha and TSX-Venture exchanges, after an unspecified technical issue caused problems with entering, modifying or canceling open orders on the former two, TMX said on Twitter.

TMX later tweeted that the halt would remain in effect for the remainder of the day on all three platforms and apologized to users for the inconvenience.

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“TMX continues to investigate the problem,” the operator said in an earlier tweet.

The S&P/TSX composite was on track for its lowest close since November as stocks across the globe and oil prices continued to tumble on Thursday as traders fretted over the economic impact of the spreading coronavirus.

The TSX fell as much as 585 points and was down 325 points, or 1.9 per cent, when it was halted, while U.S. markets fell more than four per cent.

The Dow Jones Industrial Average sank nearly 1,200 points Thursday, deepening a weeklong global market rout caused by worries that the coronavirus outbreak will wreak havoc on the global economy.

Bond prices soared again, sending the yield on the 10-year Treasury to another record low. When yields fall it’s a sign that investors are feeling less confident about the strength of the economy going forward.

“People can demand things that feel safe for irrational amounts of time,” said Katy Kaminski, chief research strategist at AlphaSimplex Group. “It doesn’t matter, the fundamentals, when people are worried.”

The latest losses extended a slide in stocks that has wiped out the solid gains the major indexes had posted early this year.

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The S&P 500 is now 12% below the all-time high it set just a week ago. This is now the stock market’s worst week since October 2008, when Wall Street was mired in the financial crisis.

Investors came into 2020 feeling confident that the Federal Reserve would keep interest rates at low levels and the U.S.-China trade war posed less of a threat to company profits after the two sides reached a preliminary agreement in January. The virus outbreak has upended that rosy scenario as economists lower their expectations for economic growth and companies warn of a hit to their business.

The S&P 500 index’s sharp decline from its last record high puts it in what market watchers call a “correction,” a normal phenomenon that analysts have said was long overdue in this bull market, which is the longest in history.

Microsoft warned that the virus outbreak had interrupted its supply lines and would hurt its financial performance, following a similar warning last week from Apple. The two stocks led another sell-off among technology companies. Energy stocks fell sharply as the price of oil dropped 3.4%.

“This is a market that’s being driven completely by fear,” said Elaine Stokes, portfolio manager at Loomis Sayles, with market movements following the classic characteristics of a fear trade: stocks are down, commodities are down and bonds are up.

Stokes said the swoon reminded her of the market’s reaction following the Sept. 11, 2001 terrorist attacks.

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“Eventually we’re going to get to a place where this fear, it’s something that we get used to living with, the same way we got used to living with the threat of living with terrorism,” she said. “But right now, people don’t know how or when we’re going to get there, and what people do in that situation is to retrench.”

The S&P 500 fell 137.63 points, or 4.4%, to 2,978.76, its biggest one-day drop since 2011.

The Dow fell 1,190.95 points, or 4.4%, to 25,766.64. The Nasdaq dropped 414.29 points, or 4.6%, to 8,566.48. The Russell 2000 index of smaller company stocks lost 54.89 points, or 3.5%, to 1,497.87.

The virus has now infected more than 82,000 people globally and is worrying governments with its rapid spread beyond the epicenter of China.

Japan will close schools nationwide to help control the spread of the new virus. Saudi Arabia banned foreign pilgrims from entering the kingdom to visit Islam’s holiest sites. Italy has become the centre of the outbreak in Europe, with the spread threatening the financial and industrial centres of that nation.

At their heart, stock prices rise and fall with the profits that companies make. And Wall Street’s expectations for profit growth are sliding away. Apple and Microsoft, two of the world’s biggest companies, have already said their sales this quarter will feel the economic effects of the virus.

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Goldman Sachs on Thursday said earnings for companies in the S&P 500 index might not grow at all this year, after predicting earlier that they would grow 5.5%. Strategist David Kostin also cut his growth forecast for earnings next year.

Besides a sharply weaker Chinese economy in the first quarter of this year, he sees lower demand for U.S. exporters, disruptions to supply chains and general uncertainty eating away at earnings growth.

Such cuts are even more impactful now because stocks are already trading at high levels relative to their earnings, raising the risk. Before the virus worries exploded, investors had been pushing stocks higher on expectations that strong profit growth was set to resume for companies.

The S&P 500 was recently trading at its most expensive level, relative to its expected earnings per share, since the dot-com bubble was deflating in 2002, according to FactSet. If profit growth doesn’t ramp up this year, that makes a highly priced stock market even more vulnerable.

Goldman Sach’s Kostin said the S&P 500 could fall to 2,900 in the near term, which would be a nearly 7% drop from Wednesday’s close, before rebounding to 3,400 by the end of the year.

Traders are growing increasingly certain that the Federal Reserve will be forced to cut interest rates to protect the economy, and soon. They’re pricing in a better than two-in-three probability of a cut at the Fed’s next meeting in March. Just a day before, they were calling for only a one-in-three chance.

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A handful of companies have managed to gain ground in the latest rout of stocks. Medical teleconferencing company Teladoc surged 15.7% and 3M, which counts surgical masks among its many products, rose 0.8%.

The market’s sharp drop this week partly reflects increasing fears among many economists that the U.S. and global economies could take a bigger hit from the coronavirus than they previously thought.

Earlier assumptions that the impact would largely be contained in China and would temporarily disrupt manufacturing supply chains have been overtaken by concerns that as the virus spreads, more people in numerous countries will stay home, either voluntarily or under quarantine. Vacations could be cancelled, restaurant meals skipped, and fewer shopping trips taken.

“A global recession is likely if COVID-19 becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in Italy and Korea,” said Mark Zandi, chief economist at Moody’s Analytics.

The market rout will also likely weaken Americans’ confidence in the economy, analysts say, even among those who don’t own shares. Such volatility can worry people about their own companies and job security. In addition, Americans that do own stocks feel less wealthy. Both of those trends can combine to discourage consumer spending and slow growth.

Canadian Press and Associated Press

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