• Cases of coronavirus have jumped in China, South Korea and now have been reported in Middle East.
  • Global airlines may lose $29.3 billion of revenue this year due to the virus
  • Existing home sales declined 1.3% in January

U.S. stocks dropped on Friday, with the Dow Jones Industrial Average slipping under 29,000, on a spike in coronavirus cases in China and South Korea and some weak economic data stateside.

The Dow Jones Industrial Average fell 227.51 points to 28,992.47 while the S&P 500 dropped 35.55 points to 3,337.68 and the Nasdaq Composite Index tumbled 174.37 points to 9,576.59.

For the week, the Dow fell 1.38%.

Volume on the New York Stock Exchange totaled 3.11 billion shares with 931 issues advancing, 175 setting new highs, and 2,018 declining, with 87 setting new lows.

Active movers were led by Sprint Corp. (S), Advanced Micro Devices Inc. (AMD) and Ford Motor Co. (F)

China’s National Health Commission reported more than 800 new cases of coronavirus overnight for a total of 75,465, along with 2,236 deaths on the mainland. South Korea reported 52 new cases pushing up its total to 150. Cases have also been confirmed in Iran.

Analysts worried about the ongoing economic fallout from the virus.

“Even if the outbreak recedes, global growth is still set to fall to zero in the first quarter, before bouncing back over the remainder of the year,” said Peter Berezin, chief global strategist at BCA Research. “Thus, a near-term hit to corporate earnings now looks unavoidable.”

The International Air Transport Association predicted that global airlines will lose $29.3 billion of revenue this year due to the virus outbreak. Of that total airlines in the Asia Pacific region will lose $27.8 billion revenue.

Various senior officials from the Federal Reserve made comments on various topics on Friday.

Fed governor Lael Brainard said the central bank should establish temporary inflation targets above 2%, to compensate for periods when inflation is below target. “By committing to achieve inflation outcomes that average 2% over time, the committee would make clear in advance that it would accommodate rather than offset modest upward pressures to inflation in what could be described as a process of opportunistic reflation,” she said.

Brainard also said the Fed should act aggressively to mitigate future economic downturns.

“The lessons from the crisis would argue for an approach that commits to maintain policy at the lower bound until full employment and target inflation are achieved,” Brainard said.

Atlanta Federal Reserve President Raphael Bostic told CNBC that he sees no need for further rate cuts.

“My baseline expectations are that the economy is not going to see rising risks and it’s going to stay stable, so we won’t have to do anything [on rates],” he said.

Federal Reserve Bank of St. Louis President James Bullard told CNBC there’s a “high probability that the coronavirus will blow over, as other viruses have, be a temporary shock and everything will come back [to normal].”

Loretta Mester, president of the Federal Reserve Bank of Cleveland said the central bank should be more transparent about what influences monetary policy.

“We have to be open to the possibility that the markets’ view may be more in alignment with fundamentals than the policymakers’ view,” she added

Federal Reserve Vice Chairman Richard Clarida rejected notions that the central bank follows financial market expectations for its monetary policy.

In economic data, the National Association of Realtors said existing home sales declined 1.3% in January to a seasonally adjusted annual rate of 5.46 million.

The IHS Markit's Manufacturing PMI dropped to 50.8 in February, worse than expected, from 51.9 in January. The IHS Markit's Services PMI slipped to 49.4 in February, the lowest reading in more than six years, suggesting contraction in the sector's activity. The Composite PMI fell to 49.6 in February from 53.3 in January.

Overnight in Asia, markets finished mixed. China’s Shanghai Composite gained 0.31%, while Hong Kong’s Hang Seng dropped 1.09%, and Japan’s Nikkei-225 fell 0.39%.

In Europe markets finished lower, as Britain’s FTSE-100 fell 0.44%, France’s CAC-40 slashed 0.54% and Germany’s DAX dropped 0.62%.

Crude oil futures dropped 1% at $53.34 per barrel and Brent crude slipped 0.22% at $58.37. Gold futures rose 1.6%.

The euro rose 0.6% at $1.085 while the pound sterling gained 0.61% at $1.2961.

The yield on the 10-year Treasury plunged 3.54% to 1.471% while yield on the 30-year Treasury dropped 2.74% to 1.918%.