The Dow Jones Industrial Average gave up early gains Wednesday and closed lower, but it avoided the steep drops of the past two days that were sparked by fears that the rising number of coronavirus cases outside China could hurt global growth.

The Dow, which fell more than 1,900 points Monday and Tuesday in its largest two-day decline on record and wiped out about $1.7 trillion in market value, climbed as much as 461.42 points in early trading Wednesday.

It turned briefly negative at midday and then struggled to hold onto tepid gains before turning down for the remainder of the trading day.

The DJIA closed down 123.77 points, or 0.46 percent, at 26,957.59. The S&P 500 lost 11.82 points, or 0.38 percent, and closed at 3116.39. But the technology-heavy Nasdaq Composite gained 15.16 points, or 0.17 percent, and closed at 8980.77.

The continued spread of the coronavirus outside China again spooked the market. Investors hoped stocks would stabilize after the blue-chip index fell so much on Monday and Tuesday.

"Unfortunately, I think this is going to turn into a full-blown correction," said David Bianco, chief investment strategist for the Americas at DWS, on CNBC's Squawk Box Wednesday. "It's a material impact to our earnings outlook, and it's probably going to be another year of flatish earnings growth."

Investors sought safety in government bonds, pushing the yield on the 10-year Treasury note down to 1.305 percent from Tuesday's all-time low of 1.328 percent. Yields on tax-exempt municipal bonds also fell. Lower yields mean less income for investors.

Brent crude oil, a worldwide benchmark, fell $0.11, or 0.21 percent, to $52.72 a barrel amid fears of lower demand for energy in a worldwide economic slowdown caused by the coronavirus outbreak. It was the fourth consecutive down day for oil prices.

The market got a fresh case of jitters Wednesday after a US Food and Drug Administration (FDA) official said the spread of novel coronavirus pneumonia, also called COVID-19, is likely to become a pandemic.

"For all intents and purposes, I think it's fair to say we are on the cusp of the pandemic," said Peter Marks, director of the FDA's Center for Biologics Evaluation and Research, to Bloomberg News. "Is it definitely going to happen? No, but there is significant concern, as of overnight we have cases on six continents."

The growing number of infections outside China has increased risks for the US.
Earlier Wednesday, Brazil confirmed the first case of the coronavirus in Latin America. South Korea reported 169 new cases, increasing the country's total to 1,146. The number of confirmed cases in Italy rose to more than 380.

The number of travel-related cases in the US totaled 12, and there were two confirmed cases of person-to-person spread of the disease. Forty-two US citizens who were aboard the cruise ship Diamond Princess have been quarantined, according to the US Centers for Disease Control and Prevention (CDC).

White House economic adviser Larry Kudlow said investors should buy "these dips" in the market amid the coronavirus frenzy to pick up stocks at lower prices, The Washington Post reported.

Jeffrey Gundlach, CEO of DoubleLine Capital, believes the market selloff can be largely attributed to the political rise of Senator Bernie Sanders of Vermont, a self-proclaimed democratic socialist, in the Democratic presidential primaries.

"The market is digesting a better than 50 percent chance of Bernie getting the nomination," he told CNBC in an email. "The market goes down in a knee-jerk way on the Bernie rise, but the market going down makes Bernie's polls go up on his rejection of a market-based economy."

Among US companies reporting a possible impact from the COVID-19 threat was Coca-Cola.

The Atlanta, Georgia-based company said Monday that the threatened pandemic could delay the production and export of ingredients, including the sucralose artificial sweetener from China used in Diet Coke and other drinks.

"While we currently expect this business disruption to be temporary, there is uncertainty around its duration and its broader impact, and therefore the effects it will have on our business," the company wrote in its annual report.