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Coronavirus sinks stock markets as first death reported in U.S.

Trump administration tries to calm financial markets instead of preparing for outbreak
By Masao Suzuki |
March 1, 2020
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San José, CA - By Friday, February 28, the U.S. stock markets had their worst week since the financial crisis in 2008. Stocks closed down 15% on average from their record highs just the week before. The Dow Jones Industrial Average had lost 1000 points during the day but ended down 350 points on hopes that the Federal Reserve would cut interest rates at their next meeting in mid-March.

Over the weekend the first death from the novel coronavirus, or COVID-19, was reported in the state of Washington. The death was one of four cases on the West Coast which could not be traced to any international travel. From the similarities of the infections, experts estimated that the virus had been circulating in the United States for six weeks, meaning that there could be 150 to 1500 more infections in the United States.

Up until this weekend, all testing for the COVID-19 virus had to go through the Centers for Disease Control in Atlanta. This led to delays in testing on of the coronavirus patients in California and was just another sign of how unprepared the United States is. A study from a decade ago estimated that U.S. hospitals had only one-tenth the number of respirators needed to deal with a bad flu epidemic. Another sign was the plea by the U.S. Surgeon General for the general public to not buy masks in order to preserve the limited supply for health workers. The United States has only about one-tenth the number of masks needed, and almost all of the masks are produced in other countries.

Trump’s top economic advisor, Larry Kudlow, repeated that the threat was low and that the administration is “staying the course.” Trump continued to say that the virus was still coming from outside the country, announcing travel restrictions on Iran, Italy and South Korea, despite the news of a man dying in the state of Washington.

Around the world stock markets also fell about 15% as bad news continued to pile up outside of China. On Saturday there were more than twice as many new infections outside China as inside, with more cases in South Korea alone than in all of China. The impact of the virus and the fight against it continued to pound the South Korean economy, with more auto plants shutting down because of parts shortages. The South Korean economy took the biggest tumble in February since the financial crisis of 2008.

All the news was not so grim. New infections have fallen in China and the economy, while still hurting, is starting to improve as businesses start to reopen. China felt confident enough about its fight against the COVID-19 that on Saturday the Chinese Red Cross sent medical supplies, equipment and doctors to Iran to help in their fight against the novel coronavirus.

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