Stocks swoon as virus fears spread
U.S. stocks fell sharply Monday, sending the Dow Jones industrial average down more than 450 points, as investors grappled with fresh worries about the spread of a new virus in China that threatens global economic growth.
The selloff gave the Dow its first five-day losing streak since early August and handed the S&P 500 its worst day since early October. Both indexes were off about 1.5%, giving up a significant portion of their gains this month.
The Dow fell 453.93 points, or 1.6%, to 28,535.80. The Dow had been down nearly 550 points. The S&P 500 index dropped 51.84 points, or 1.6%, to 3,243.63. The Nasdaq lost 175.60 points, or 1.9%, to 9,139.31.
The latest bout of selling on Wall Street came after China announced a sharp rise in cases of the virus.
Airlines, resorts and other companies that rely on travel and tourism suffered steep losses.
Gold prices rose as did bonds as traders sought refuge in safer holdings.
The yield on the 10-year Treasury fell to 1.60%, its lowest level since October. The market’s broad slide followed a selloff in Europe and Japan.
“Over the weekend you saw more cases,” said Quincy Krosby, chief market strategist at Prudential Financial. “That got investors and traders worried that this may be a longer event. The next question is, ‘What happens to global growth if this does continue and magnify?’ ”
Chinese health authorities have confirmed 2,750 cases of the virus along with 81 related deaths as authorities extended a weeklong public holiday by an extra three days as a precaution against having the virus spread still further.
The virus has spread to a dozen countries, including the U.S. Besides the threat to people’s lives and health, investors are worried about how much damage the virus will do to profits for companies around the world.
Resort operators were among the biggest losers in the S&P 500. Wynn Resorts led all companies in the index lower with an 8.1% tumble, while Las Vegas Sands dropped 6.7%. The companies get most of their revenue from the Chinese gambling haven of Macao. MGM Resorts fell 3.9%.
American Airlines lost 5.5% and Delta dropped 3.4% as part of a broad slide for airlines because of concerns international travel will decline amid the virus’ spread. Booking companies and cruise line operators also were hurt. Expedia Group fell 2.7% and Carnival slid 4.7%.
Chinese companies that trade shares in the U.S. also declined. Search engine operator Baidu fell 2.9% and ecommerce company JD.com dropped 4.8%.
The technology sector, the biggest in the S&P 500, also saw heavy selling. Apple, which relies on China for supplies and sales, fell 2.9%.
A few companies managed to climb against the sliding markets. Bleach and cleaning products maker Clorox rose 1.1%.
Investors are also dealing with a heavy week of corporate earnings. Apple will report financial results on Tuesday. Pharmaceutical giant Pfizer and Starbucks will also report.
Benchmark crude oil fell $1.05 to settle at $53.14 a barrel. Brent crude oil dropped $1.37 to close at $59.32 a barrel.
The dollar fell to 108.92 Japanese yen from 109.24 yen on Friday. The euro weakened to $1.1020 from $1.1029.