Wires

US STOCKS-Dow sinks 1,000 points as pandemic fears rattle Wall Street

Medha Singh

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* Indexes drop: Dow 3.54%, S&P 3.49%, Nasdaq 3.95%

* High-growth technology stocks lead slide

* Wall Street's fear gauge surges to over 1-yr high

* Health insurers fall after Bernie Sanders' Nevada victory (Updates to early afternoon)

Feb 24 (Reuters) - The Dow Jones Industrials shed 1,000 points on Monday and the S&P 500 was set for its worst day in two years as a surge in coronavirus cases outside China clouded global growth outlook.

Several countries including Iran, Italy and South Korea reported a rise in virus cases over the weekend, fanning fears of a pandemic that prompted a rush to safe-haven assets such as gold and U.S. Treasuries.

An yield curve inversion between the 3-month and 10-year U.S. Treasuries deepened in a classic recession sign. Adding to worries, Goldman Sachs slashed its U.S. growth forecast and predicted a more severe impact from the epidemic, CNBC reported.

The blue-chip Dow has now erased its gains for the year, while the benchmark S&P 500 is about 5% below its all-time high hit last week. The Nasdaq is 6.5% off its record peak.

All of the 11 major S&P sectors were in the red, led by a 4.1% drop in technology stocks.

Apple Inc slid 4.4% as data showed sales of smartphones in China tumbled by more than a third in January.

Wall Street's main indexes notched record highs last week, partly on optimism that the global economy would be able to snap back after an initial hit, supported by central banks.

"It is not as though the numbers have changed dramatically but what has changed is the geography, which adds a new level of concern," said Art Hogan, chief market strategist at National Securities in New York.

"What the market is trying to predict here is how large will this get globally, and when will it start to peak."

China-exposed chipmakers slipped, with the Philadelphia SE Semiconductor index dropping 4.7%, while concerns about growing travel curbs dragged the NYSE Arca Airline Index down 6.2%.

The CBOE Volatility Index, a gauge of investor anxiety, jumped to its highest level since January 2019.

At 1:06 p.m. ET, the Dow Jones Industrial Average was down 1,027.29 points, or 3.54%, at 27,965.12 and the S&P 500 was down 116.33 points, or 3.49%, at 3,221.42. The Nasdaq Composite was down 377.81 points, or 3.95%, at 9,198.78.

The S&P 500 fell below its 50-day moving average and the Dow slipped below its 100-day moving average, all closely watched indicators of momentum.

Health insurers such as UnitedHealth Group Inc and Cigna Corp dropped nearly 8% as Bernie Sanders, who backs the elimination of private health insurance, strengthened his position for the Democratic presidential nomination with a victory in the Nevada caucuses.

In a rare bright spot, Gilead Sciences Inc, whose antiviral remdesivir has shown promise in monkeys infected by a related coronavirus, rose 2.8%.

Declining issues outnumbered advancers for a 6.76-to-1 ratio on the NYSE and for a 7.63-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and 22 new lows, while the Nasdaq recorded 17 new highs and 140 new lows.

(Reporting by Medha Singh in Bengaluru, additional reporting by Stephen Culp; Editing by Saumyadeb Chakrabarty and Arun Koyyur)