New York (AFP)

Wall Street unscrewed on Tuesday for the second day in a row, investors worried that the epidemic of new coronavirus would turn into a pandemic and took refuge in bonds, whose rates fell to historic lows.

The Dow Jones Industrial Average fell 3.15% to 27,081.36 points. The flagship index of the New York Stock Exchange has collapsed by almost 7% since the beginning of the week.

The highly technological Nasdaq dropped 2.77% to 8,965.61 points and the broad S&P 500 index dropped 3.03% to 3,128.21 points.

According to Gregori Volokhine of Meeschaert Financial Services, market players are alarmed by the large-scale spread of the epidemic of viral pneumonia, especially in Italy where the authorities reported Tuesday evening of 322 cases including ten deaths.

"For an American investor, it is not Italy at the economic level which worries him, but the fact that, little by little, it is absolutely necessary to revise downward the global growth rates", explains the expert.

The prospects for a rapid rebound are fading as more and more companies say they expect to suffer from the economic consequences of the coronavirus, he adds.

The airline United Airlines (-6.5%), for example, suspended Monday evening its financial forecasts for 2020, explaining that "the range of possible scenarios" linked to the new coronavirus was "too wide to currently set targets" .

The company is thus in the wake of several large companies that warned that the epidemic would affect their results, like Apple, Procter & Gamble or Coca-Cola.

White House economic adviser Larry Kudlow wanted to be reassuring when he said on CNBC financial news on Tuesday that the epidemic would not be an economic tragedy despite some inevitable snags.

"If you are investing for the long term, I think you should seriously consider returning to the equity market where the results have been excellent over the long term," said Mr. Kudlow, echoing a published tweet. the day before by Donald Trump, who said he was enthusiastic about the health of the American stock market.

Risk aversion, however, remained very high on Tuesday, as the rate on the US 10-year debt fell to its historic low, at 1.3055%, around 19.10 GMT. A fall in the bond rate is synonymous with an increase in the prices of treasury bills, and therefore in rising demand.

The 30-year rate on US Treasuries was also moving to an all-time low, falling to 1.7852% earlier today.

"When money comes out of a market, it will position itself elsewhere or it will remain in cash", specifies Mr. Volokhine.

"For the moment, it will obviously position itself in the American bond market, but also in the European bond markets. It is a pure reflex of fear," he continues.

© 2020 AFP