FRANKFURT, Germany (AP) — The widening coronavirus outbreak threatens to seriously disrupt the global economy, just as it was steadying itself against headwinds from the U.S.-China trade dispute.

Amid concerns that global output could decline for the first time since the global financial crisis a little more than a decade ago, stock markets sank Monday. In one sign of how sentiment has been negatively hit, gold spiked 1.8% to $1,688 an ounce, its highest level in seven years, as traders sought out financial assets some consider safer in times of stress.

On Wall Street, the Dow Jones was down more than 900 points during early afternoon Monday trading, while in Europe, the pan-European Stoxx 600 slid 3.6% after an eruption of cases in Italy. Cases were also reported in new countries in the Middle East.

“Compounded with the already dramatic interruptions to global supply chains in China, traders fear that a rapid spread of the disease to other major economies could be enough to temporarily tip global economic growth into contraction in the first half of the year," said Matt Weller, global head of market research at GAIN Capital in London.

China, the epicenter of the outbreak, faces the most acute near-term difficulties as factories lie idle and people remain homebound. But the ripple effects are being felt all around the world, as China is both a major importer of goods as well as a source of parts through intricate supply chains. Growth estimates for China are already being cut.

Concerns are growing in the 19-country eurozone, whose three biggest economies — Germany, France and Italy — are stalling. Concerns over the knock-on effects on Germany, Europe's export powerhouse, are particularly acute. Germany's main DAX stock market closed a whopping 4% lower Monday. .

“Given the latest developments, one has inevitably to talk about downside risks for German exporters,” said Andreas Rees, chief German economist at UniCredit.

Rees cited figures showing car sales in China fell 92% in the first two weeks of February, and pointed out that of the 21 million cars sold in China last year, about 1 in 5 was made either in Germany or through German investment in China. Most Chinese auto showrooms are closed.

Meanwhile Italy's FTSE MIB slumped 5.4% as Italian civil protection officials said at least 222 people had tested positive for the virus in the country and that six people had died.

Jack Allen-Reynolds, senior Europe economist at Capital Economics, said the virus “makes another recession in Italy more likely than not.”

Europeans had been hoping for a modest upturn this year after major economies staggered through a rough patch at the end of the year. Germany showed zero growth in the fourth quarter, while the No. 2 and No. 3 economies, France and Italy, shrank slightly. Two straight quarters of falling growth is one definition of a recession.

The global economy was just stabilizing after wobbles caused by the trade war between the U.S. and China and fears of a disorderly British exit from the European Union.The coronavirus hit just as a U.S.-China preliminary deal and a Brexit withdrawal divorce agreement had boosted hopes for a modest upswing, particularly in Europe.

Nowthe world economy could see its first quarterly fall in seasonally adjusted output since the global financial crisisof more than a decade ago, says Ben May, director of global macro research at Oxford Economics.

Frequent business and tourism destinations for people from China are already being hit hard, confirming that this will be a key way that the pain will spread to other Asian economies, with Singapore and Hong Kong feeling the effects.

Comparisons to the 2003 SARS epidemic, another deadly outbreak that originated in China, aren't reassuring because China's share of the global economy is much bigger than it was back then, and supply chains moving raw materials, parts and products snake through the global economy more than ever.

Stock markets may have been slow to appreciate the risk posed by the outbreak because they hoped central banks could step in with more stimulus.

Individual companies have already reported trouble, most notably Apple, which said it will miss its sales target. But it could take until April or May before hard data on production and sales gives a clear picture of the impact on a regional or global level, Oxford Economics' May said.

Markets are now pricing in a bigger chance for a rate cut by the European Central Bank by July, even though the ECB has already cut rates into unprecedented negative territory. Its key benchmark deposit rate is minus0.5%.

Kristalina Georgieva, the head of the International Monetary Fund, said that the fund's baseline scenario is that China's economy slows but returns to normal in the second quarter.

“But we are looking at more dire scenarios, where the spread of the virus continues for longer and more globally, and the growth consequences are more protracted," she said.

Testifying to Congress on Feb. 11, Fed Chairman Jerome Powell said that it was too early to assess the scope of the impact the virus poses to the U.S. economy. He noted that at the moment the economy “is in a very good place ”with strong job creation and steady growth.

Powell indicated that he saw no need to change the Fed’s benchmark interest rate, which is in a range of 1.5% to 1.75% after three rate cuts in 2019.

Raphael Bostic, head of the Fed’s Atlanta regional bank, said Friday that he expected the coronavirus to “be a short-time hit; we’ll get the economy back to its usual level” after the adverse effects pass.

The U.S. economy still looks resilient, growing at a solid 2.1% annual rate the last three months of 2019. American consumers are driving the record-breaking expansion, now in its 11th year.

Business investment has been weak, partly because President Donald Trump’s trade wars have generated uncertainty about where companies should locate factories and buy supplies. Investment could get weaker if the virus continues to disrupt the supply chains American businesses rely on.

AP business writers Paul Wiseman and Martin Crutsinger contributed from Washington.