Wires

UPDATE 5-U.S. to push production of protective gear for coronavirus; new case confirmed in California

Steve Holland and Richard Cowan

confirmed in California@ (Adds new confirmed case in California)

WASHINGTON, Feb 28 (Reuters) - The United States will invoke a federal defense law to boost production of masks, gloves, gowns and other items to protect against the new coronavirus, the Trump administration said, as a new case was confirmed in California on Friday.

The latest U.S. case was reported in Santa Clara county in California, home to the Silicon Valley technology hub. At the same time more countries were reporting new infections, companies curtailed travel and global stock markets were on the precipice of a free fall.

"We will use the Defense Production Act as necessary to enable that our contracts go to the front of the line," U.S. Health and Human Services Secretary Alex Azar said in a briefing at the White House. "That is an authority that we have, and we will use it to acquire anything we need to acquire."

Two U.S. officials told Reuters on Thursday that Trump's administration was considering invoking special powers through the law to rapidly boost production of key materials for national security or other reasons.

The number of confirmed U.S. cases of the respiratory disease is still relatively small at roughly 60, most of them repatriated American passengers from the Diamond Princess cruise ship docked in Japan, but there are growing fears that the country is on the cusp of wider outbreak.

"In every case, people are being treated and by all accounts are doing well," U.S. Vice President Mike Pence said on Friday during a live-streamed news conference.

The outbreak started in China late last year. World Health Organization (WHO) figures indicate that over 82,000 people have been infected, with more than 2,700 deaths in China and 57 deaths in 46 other countries.

Anthony Fauci, a doctor who heads the National Institute of Allergy and Infectious Diseases, said in a closed-door briefing in the U.S. House of Representatives that the sustained spread of the coronavirus meant there would be many more infections in the United States, according to a source.

Fauci warned lawmakers the country did not have enough testing resources, the source said on condition of anonymity. The U.S. Centers for Disease Control and Prevention said it has revised its criteria for who should be tested and is ramping up testing capabilities.

"Our goal is to have every state and local health department online and doing their own testing by the end of next week," CDC official Nancy Messonier told reporters.

A vaccine may take up to 18 months to develop, health officials have said.

MARKETS PLUMMET

U.S. and global stocks plummeted as rattled investors braced for the prospect that a pandemic could further dent an already slowing world economy, increasing the pressure on governments to quickly respond to the crisis.

The S&P 500 fell for the seventh straight day on Friday. The index suffered its biggest weekly drop since the 2008 global financial crisis on fears the economic disruption caused by the coronavirus could lead to a recession.

Stocks cut losses right at the end of the session. The Dow Jones Industrial Average fell 1.4%.

Amazon.com Inc, the world's largest online retailer, said all its employees should defer non-essential travel including within the United States.

In Washington, House members were advised to establish plans for alternative work arrangements in case the coronavirus becomes widespread in the country, Sergeant-at-Arms Paul Irving wrote to lawmakers.

The White House's top economic adviser, Larry Kudlow, told reporters the U.S. economy was "sound" and said the Trump administration was not planning to take any "precipitous" policy actions at this time.

Federal Reserve Chair Jerome Powell said the coronavirus posed evolving risks to economic activity, adding that the U.S. central bank was "closely monitoring" developments and would act as appropriate to support the economy.

Trump this week said the coronavirus risk to Americans remained "very low," but he has been increasingly alarmed by the reaction of the U.S. stock market, which he considers a barometer of the economy's health.

White House acting chief of staff Mick Mulvaney played down the threat, telling a conservative conference that wall-to-wall news coverage of the disease is a ploy to hurt Trump.

But prominent Democrats accused the White House of botching its efforts and preventing health officials and scientists from properly informing the public about the extent of the threat.

Former Vice President Joe Biden, who is seeking the Democratic presidential nomination, said Trump and Pence had limited Americans' access to information about the virus.

"Trump and Pence decided that the public health experts cannot inform the public on their own whats going on," Biden said at a campaign event. "Now the president wont let other people tell the truth."

Pence was tapped by the White House this week to lead the government's coronavirus response.

Funding to combat the crisis has become a political issue. The White House is seeking $2.5 billion from Congress. Senate Democratic Leader Chuck Schumer has called for $8.5 billion.

The Democratic-controlled House could vote as soon as next week on emergency funding for the anticipated medical and economic costs of an outbreak, said a congressional source.

(Reporting by Steve Holland Richard Cowan, David Morgan, Susan Heavey and Makini Brice; Additional reporting by Howard Schneider in Fort Smith, Arkansas, Lisa Lambert in Washington and Jonathan Allen, Michael Erman, Hilary Russ and Sinead Carew in New York and Dan Whitcomb in Los Angeles; Writing by Paul Simao and Ted Hesson; Editing by Alistair Bell and Grant McCool)