U.S. stocks tumbled following a sell-off in markets in Europe and Japan Monday after China announced a sharp rise in cases of a deadly new virus that threatens to crimp global economic growth.

Every major U.S. index gave up a significant amount of their gains for January and bond yields moved lower as investors headed for safer holdings, while the Dow had erased all its gains for the year in early trading, according to Bloomberg News.

The S&P 500 index slumped 1.4% in morning trading. The Dow Jones Industrial Average plunged more than 500 points shortly after the opening bell, but recovered some  by mid-morning to 28,560, down by 429 points, or 1.5%.

The Nasdaq fell 1.7%. The Russell 2000 index of smaller company stocks fell 1.2%.

Airlines, resorts and other companies that rely on travel and tourism suffered steep losses.

Gold prices rose.

Investors are in a “sell first, ask questions later situation,” said Alec Young, managing director of global markets research at FTSE Russell.

Most markets in Asia were closed for the Lunar New Year holiday, but Japan’s Nikkei fell 2.03%, its biggest decline in five months.

European markets also slumped. Germany’s DAX dove 2.4%.

Tourism takes hit

With tens of millions of Chinese ordered to stay put and many others avoiding travel as the virus spreads, tourism around the globe is also taking a heavy hit during one of the biggest travel seasons in Asia, the Lunar New Year.

Tourism from China was already weakening before the coronavirus forced much of the country into a standstill. In Thailand, a favorite tropical destination for Lunar New Year travel, officials estimate potential lost revenue at 50 billion baht ($1.6 billion). In Asia and much farther away, hotels, airlines, cruise operators and others who depend on big spending Chinese tourists are ruing their absence.

McDonald’s, Disney affected

McDonald's said it has closed all of its restaurants in five cities in Hubei province — Wuhan, Ezhou, Huanggang, Qianjiang and Xiantao — until further notice. Its operations are running in other cities in Hubei where public transportation is available.

The fast-food giant is also taking the temperature of all employees when they arrive at work and sending anyone with a fever or cold symptoms home. Delivery drivers are required to wear masks. McDonald's is also disinfecting high-contact surfaces more frequently at its Chinese establishments, including tables, chairs door handles and self-ordering kiosks.

The Shanghai Disney Resort announced Friday that it is temporarily closing Shanghai Disneyland “in response to the prevention and control of the disease outbreak and in order to ensure the health and safety of our guests.''

Impact on US automakers

Ford, General Motors and Fiat Chrysler all have restricted travel to Wuhan and other parts of China affected by the virus. Most auto factories, though, remain closed for the Chinese New Year and haven’t been affected yet. Ford said in a statement that it has a special team monitoring the situation.

Fiat Chrysler has banned corporate travel in areas locked down by the Chinese government due to the virus, while GM has restricted travel to all of China unless it is “business critical and approved in advance,” a company statement said.

What’s being done

On Monday, China extended the week-long holiday by an extra three days to Feb. 2 to help prevent the epidemic from spreading further, as authorities announced that 2,744 people had fallen ill and 80 had died from the new virus first found in the central Chinese city of Wuhan. Shanghai pushed the holiday's end back to Feb. 9.

Travel agencies in China were told to cancel group tourism, and governments around the region were restricting travel from Wuhan, closely monitoring other travelers and helping arrange evacuations of some foreigners stuck in Wuhan.

So far, 17 Chinese cities that are home to more than 50 million people have imposed lockdowns.

Previously

Tourism from China to the U.S. was already on a decline even before the coronavirus hit, hurt by the prolonged trade dispute between Beijing and Washington. In 2018, travel from China to the U.S. fell for the first time in 15 years, according to the National Travel and Tourism Office, which collects data from U.S. Customs forms.

Impact on commodities

Restrictions on travel and fears about flying to the region could take a toll on demand for oil, gasoline and jet fuel. The suspension of public transportation services and quarantine enacted Thursday could cause a short-lived oil demand drop of 50,000 to 70,000 barrels per day in the Hubei province, according to an analysis from S&P Global Platts.

Global oil demand is likely to drop by 150,000 barrels per day in the next two months, but “if a significant economic slowdown were to ensue as a result of the virus spreading, then the overall demand impact could exceed the 700,000 barrels per day,” said Claudio Galimberti, head of demand, refining and agriculture analytics at S&P Global Platts.

The SARS outbreak in 2003 led to a drop of 300,000 barrels of oil per day during the height of the epidemic.

What’s at stake

The impact of the crisis will be difficult to estimate accurately, given the wide range of businesses likely to be affected, apart from the trips cancelled, fewer shop-til-you-drop mall visits, restaurant meals and hotel stays.

“The structural changes to the global economy complicate the economic analysis of this because there are linkages within economies, across sectors, and across international trade and capital flows that need to be factored," Stephen Innes, chief market strategist for AxiCorp, said in a commentary.

— Compiled by ArLuther Lee for The Atlanta Journal-Constitution.