(Adds U.S. market open, byline, dateline; previous LONDON)
* Stocks snap large gains made after Biden’s strong showing
* Dollar falls as traders look for another Fed rate cut
* Oil falls on virus concerns even as OPEC agrees to output cuts
NEW YORK, March 5 (Reuters) - Global equity markets tumbled and the dollar slid on Thursday as the number of coronavirus cases outside China mounted rapidly, leading California to declare an emergency and HSBC in London to send more than 100 staff home.
Italy’s UniCredit also told some staff to go home while corporations around the world began issuing profit warnings, with Southwest Airlines Co saying it expected a hit of up to $300 million to its first-quarter operating revenue.
In a sign of deep damage to the travel industry, British regional airline Flybe collapsed, making the struggling carrier the industry’s first big casualty of the outbreak.
British commercial broadcaster ITV fell 12.0% after warning that ad revenue for April could fall by about 10% as travel companies deferred campaigns.
“I thought 2020 would be the year of the election but it turns out it’s the year of the virus, and it’s going to dominate everything in the global economy this year,” said David Kelly, chief global strategist at JPMorgan Asset Management.
The Institute of International Finance cut its forecast for the U.S. and Chinese economies because of the coronavirus and warned that global growth could be the weakest since the financial crisis a decade ago.
Global growth in 2020 could conceivably approach 1%, far below the 2.6% expansion in 2019, the Washington-based financial industry association said. The pandemic is now in some 80 countries and has killed more than 3,000 worldwide.
Mainland China had 139 new confirmed cases as of Wednesday, the National Health Commission (NHC) said, bringing the total accumulated number of cases to 80,409.
U.S. markets swung sharply higher Wednesday after the strong performance of former Vice President Joe Biden in the Democratic nomination campaign and the U.S. House of Representatives approved an $8.3 billion funding bill to combat the coronavirus.
But the rising number of cases, and deaths, outside of China swiftly changed the mood, as European equity markets snapped a three-day winning streak and U.S. stocks fell sharply.
MSCI’s gauge of stocks across the globe shed 1.33%, while emerging market stocks rose 0.31%.
The pan-European STOXX 600 index lost 1.35%.
On Wall Street, the Dow Jones Industrial Average fell 699.71 points, or 2.58%, to 26,391.15. The S&P 500 lost 75.32 points, or 2.41%, to 3,054.8 and the Nasdaq Composite dropped 169.24 points, or 1.88%, to 8,848.85.
The dollar slipped to a fresh eight-week low as traders bet the Federal Reserve will cut interest rates further, and gold prices climbed about 1.5% to a more than one-week high.
Money markets are pricing in another 25 basis point cut from the current 1% to 1.25% range at the next Fed meeting on March 18-19 and a 50 basis point cut by April. The Fed cut its target rate by one-half percentage points on Tuesday.
The dollar index fell 0.563%, with the euro up 0.57% to $1.1198.
The Japanese yen strengthened 0.94% versus the greenback at 106.55 per dollar.
U.S. economic data still does not show the impact from the coronavirus. The number of Americans filing for unemployment benefits fell last week, which suggests the labor market is on solid footing despite the outbreak.
Labor market strength was underscored by other data on Thursday showing planned job cuts by U.S.-based employers fell sharply in February.
The economic effects of the epidemic are not showing up in the hard data that people look at but the storm is approaching, Kelly said.
“We have not seen the eye-wall of this storm yet. But it will gradually fade and as it does the global economy will pick up relatively quickly in 2021,” he said, an important consideration investors need to take into account, and not to panic.
Oil prices edged lower on coronavirus concerns, but losses were limited as the Organization of the Petroleum Exporting Countries agreed on deeper output cuts to bolster prices.
OPEC agreed to cut oil output by an extra 1.5 million barrels per day in the second quarter of 2020, its deepest cut since the 2008 financial crisis, but its action is conditional on Russia and others joining in.
Brent crude fell by 18 cents to $50.95 a barrel. U.S. West Texas Intermediate slid 13 cents to $46.65.
Spot gold added 1.7% to $1,662.55 an ounce.
Reporting by Herbert Lash Editing by Chris Reese