Stocks fell on Friday after the second U.S. case of the deadly coronavirus was confirmed, stoking concerns over the sickness' impact on the global economy.
The Dow Jones Industrial Average closed down 170.36 points, or 0.6%, at 28,989.73 after jumping more than 100 points earlier in the day. Friday also marked the Dow's first close below 29,000 since Jan. 14.
The 30-stock average briefly fell more than 300 points before recovering some of those losses as Boeing shares turned around. The S&P 500 fell 0.9% to 3,295.47, for its worst loss of the young year. The Nasdaq Composite ended the day 0.9% lower at 9,314.91.
"You could see going into the weekend the 10-year Treasury yield is down, gold is higher, the market is in a text book defensive state," said Quincy Krosby, chief market strategist at Prudential Financial. "We had a market that was poised for a bout of profit-taking and this is it."
On Friday, the Centers for Disease Control and Prevention said a Chicago resident who traveled to Wuhan — the Chinese city where the coronavirus originated — in December was diagnosed with the sickness.
U.S. Senator John Barrasso later said the CDC told lawmakers they are about to confirm a third case of the Wuhan virus in the U.S. "It looks like have two documented cases in the US, it looks like third may be confirmed as well."
Shares of United Airlines and American both fell more than 5%. Las Vegas Sands and Wynn Resorts also dropped more than 3% each.
Treasury yields fell, pushing bank shares lower. The benchmark 10-year yield dipped below 1.7%. JPMorgan Chase, Citigroup and Bank of America all traded more than 1.5% lower.
"The market is in nervous mode right now," said Gregory Faranello, head of U.S. rates at AmeriVet Securities. "We're in one of those pockets of time with risk assets and rates saying central bank liquidity is abundant, but there are still risks out there we need to pay attention to. It's not clear how those risks are going to play out."
The Cboe Volatility Index (VIX), considered to be the best fear gauge in the market, briefly broke above 15 for the first time since early January.
Fears over the possible economic impact of the coronavirus subdued stocks this week. The Dow, S&P 500 and Nasdaq all posted their first weekly loss of 2020. The Dow and S&P 500 both fell at least 1% week to date while the Nasdaq slid 0.8%.
Boeing shares rose 1.7% after the FAA said it was "pleased" with the progress being made on the 737 Max jet. A source also told CNBC the plane's grounding could be lifted before mid-year if no new issues are reported.
Stocks started Friday's session on a strong note after the release of better-than-expected earnings from American Express and Intel.
American Express reported a quarterly profit and revenue that beat analyst expectations. Those results were driven in part by strong card fee revenues. The stock gained more than 2% and hit a record high.
Intel, meanwhile, climbed more than 8% after its fourth-quarter numbers topped estimates. The company also gave an optimistic outlook for the first quarter of 2020.
Those results add to what has been a solid start to the earnings season. More than 16% of the S&P 500 has released quarterly results thus far. Of those companies, about 70% have reported better-than-expected earnings, FactSet data shows.
Nick Raich, CEO of The Earnings Scout, pointed out that S&P 500 earnings expectations are also improving, which is "a reason why stocks continue to rise. The rise in price has been more than the underlying improvement in overall EPS expectations. This is what has made stock prices expensive in our opinion."
Stocks have been on a record-setting tear since last year, with the S&P 500 rising more than 28% in 2019 and gaining more than 2% to start off 2020.
"This certainly falls out of the realm of what is considered a normal market structure," said Dan Deming, managing director at KKM Financial. "As we got closer to January, it felt like the FOMO scenario was kicking in, fear of missing out. You have market participants who needed to put money to work."
But "until you see a marked shift in inflation, I just don't see why you are not going to see money keep flowing into the equity market."
U.S. equities followed their European counterparts higher earlier in the day after IHS Markit data showed business activity in the region showed signs of stabilizing after weakening throughout 2019.
The Stoxx 600 index, which tracks a broad swath of European shares, advanced 0.9%. Germany's Dax climbed 1.4% while the French CAC 40 gained 0.9%.
"Global economic activity is slowly firming, but is not likely to be sufficiently strong as to unnerve government bond markets over the next few months," strategists at MRB Partners said in a note. "Nevertheless, the macro backdrop is sufficiently positive, and likely to remain so, to suggest that no worse than a digestion phase or mild correction will be necessary to better align equity prices with the slow-moving uptrend in earnings."
—CNBC's Ryan Browne contributed to this report.