Stock market finishes down after China virus cases spike
Stocks closed lower Thursday on Wall Street as investors turned cautious after a surge in cases of a new virus in China that threatens to crimp economic growth and hurt businesses worldwide.
The modest losses snapped a three-day streak of record highs for the S&P 500 and Nasdaq composite. The selling marked only the second day this month that the market has declined.
Investors largely set aside worries about the economic impact of the virus outbreak the past two weeks. Markets rallied this week partly due to reports that the number of new cases of the new virus in China had declined.
Hopes that the spread of the virus had peaked were dashed Thursday, when China reported a sharp rise in cases and deaths after the hardest-hit province of Hubei took a new approach to classifying and diagnosing the virus.
“We’re in a data-dearth period in the sense that we’re not really going to know fully the effects of the impact of that on Asian and Chinese growth, as well as global growth, for at least several weeks,” said Lisa Erickson, the head of traditional investments at U.S. Bank Wealth Management. “You’re just going to see some backand-forth movement (in the market) until that time.”
The S&P 500 index dropped 5.51 points, or 0.2%, and closed at 3,373.94. The Dow Jones industrial average fell 128.11 points, or 0.4%, and closed at 29,423.31. The Nasdaq fell 13.99 points, or 0.1%, and closed at 9,711.97.
The Russell 2000 index of smaller company stocks rose 4.36 points, or 0.3%, and closed at 1,693.74.
Markets in Europe and Asia finished mostly lower. The yield on the 10-year Treasury held steady at 1.62%.
The major U.S. indexes wobbled for much of the day as investors weighed company earnings reports and the latest news on the virus outbreak in China. The change in how Hubei determines and reports cases of the new virus pushed the number of cases worldwide to more than 60,000.
The spike came after two days in which the number of new cases dropped, complicating efforts to understand the trajectory of the outbreak.
Businesses have already been hurting due to the outbreak and more of them are warning that the effects will linger through 2020. Organizers of the world’s biggest mobile technology fair canceled the event, set to take place in Barcelona, Spain, because of health and safety concerns over the outbreak.
Travel-related companies fell broadly Thursday, shedding some of their gains from earlier in the week. Airlines helped pull industrial sector stocks lower. United Airlines fell 1.5%.
MGM Resorts International, which gets about 20% of its revenue from the gambling haven of Macau, pulled its profit forecast for 2020. The stock lost 5.5%. Cruise line operator Carnival slid 2%.
Technology and health care stocks were among the biggest decliners, along with companies that rely on consumer spending. Cisco Systems fell 5.2%, Mylan slid 2.3% and Hanesbrands dropped 2.6%.
Household goods makers, utilities, real estate companies and communication services stocks notched gains.
Fashion firm Ralph Lauren warned that the viral outbreak cut into fourth-quarter sales by an estimated $55 million to $70 million. The stock fell 0.6%.
Alaska Air Group bucked the trend, adding 1.5% after the airline said it will cooperate more closely with American Airlines on West Coast service.