Wires

UPDATE 7-New coronavirus case of unknown origin in California

Steve Holland and Richard Cowan

(Adds Trump comment and info about U.S. task force meeting)

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 of unknown origin 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. County health officials said it was a case of unknown origin, the second in the state so far out of 10 cases there.

Around the world, more countries are reporting new infections, companies have curtailed travel and global stock markets continued to tumble.

"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."

The United States will make a decision "very soon" about whether to bar entry to travelers from the countries with the most cases of the new coronavirus, President Donald Trump said at the White House on Friday as his administration came under fire from political opponents for its response to the outbreak.

At a rally in South Carolina on Friday night, Trump defended his administrations response to the coronavirus outbreak and accused Democrats of politicizing the disease.

This is their new hoax, Trump said at the event, held a day before the states Democratic presidential primary.

The U.S. State Department has issued travel advisories for several nations and on Friday it said Americans should reconsider travel to Italy, where nearly 900 coronavirus cases have been confirmed. A similar warning was issued earlier this week for South Korea, which has hundreds of infections.

A government task force appointed by Trump to deal with the threat will meet at the White House on Saturday morning, according to an administration official.

The number of confirmed U.S. cases of the respiratory disease is still relatively small at 62, 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," Vice President Mike Pence, who has been tapped to lead the government's coronavirus response, said on Friday during a live-streamed news conference.

Latest figures from China, where the outbreak started late last year, indicated that nearly 80,000 people have been infected, with more than 2,800 deaths. The World Health Organization reported 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.

The United States has decided to postpone a meeting with leaders of Southeast Asian countries it had planned to host on March 14 in Las Vegas because of worries about the outbreak.

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.

The S&P 500 fell for the seventh straight day on Friday, suffering its biggest weekly drop since the 2008 global financial crisis.

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.

Republican 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.

Former Vice President Joe Biden, who is seeking the Democratic presidential nomination to face Trump in November, 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."

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, a congressional source said.

(Reporting by Steve Holland, Richard Cowan, David Morgan, Susan Heavey, and Makini Brice; Additional reporting by Ginger Gibson in North Charleston, South Carolina, Howard Schneider in Fort Smith, Arkansas, Lisa Lambert, Jeff Mason, Eric Beech and Steve Holland 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)