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The major futures indexes are indicating a decline of at least 1.5 percent, with the Dow pointing to a drop of at least 400 points.
Oil is also under pressure with U.S. crude giving up 3 percent to $52.30 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, declined 3.4 percent to $58.60 per barrel.
The U.S. has five confirmed cases of the new virus from China, all among people who traveled to the city at the center of the outbreak, health officials said Sunday.
China announced it was extending its week-long public holiday by an extra three days as a precaution against having the virus spread still further. By midnight Sunday, the National Health Commission said 80 people had died out of 2,744 cases that were confirmed.
Many Asian markets, including China's, were closed for Lunar New Year holidays. Tokyo's Nikkei sank 2 percent.
In Europe, London's FTSE declined 2.5 percent, Germany's DAX fell 2.3 percent and France's CAC dropped 2.3 percent.
In germany, business morale deteriorated in January as the outlook darkened.
The virus can cause pneumonia and other severe respiratory symptoms. The World Health Organization has so far held off on declaring the situation a global emergency, which would bring more money and resources to fight it, but could trigger economically damaging restrictions on trade and travel.
|I:DJI||DOW JONES AVERAGES||23719.37||+285.80||+1.22%|
|I:COMP||NASDAQ COMPOSITE INDEX||8153.575088||+62.67||+0.77%|
On Friday, the S&P 500 had its worst day since early October, dropping 0.9 percent as health care stocks saw steep losses. The sell-off followed news that a Chicago woman had become the second U.S. patient diagnosed with the new virus from China.
The Dow Jones Industrial Average dropped 0.6 percent and the Nasdaq composite lost 0.9 percent.
Airlines and several other companies in the travel and tourism industries fared poorly amid worries about the potential economic impact of the virus. United Airlines fell 5 percent and American Airlines dropped 5.6 percent. Cruise line operator Carnival fell 4.4 percent.
Investors are digging through the latest batch of company earnings reports, including strong results from chipmaker Intel and American Express. This week is shaping up as the busiest week for earnings reports, with roughly 40 percent of the companies in the S&P 500 due to issue their results for the last three months of 2019.
The Associated Press contributed to this article.