Stocks fall as fears about deadly virus grow
S&P 500 on track for its worst day since early Oct
NEW YORK, Jan 25, (AP): Healthcare companies led a broad slide in US stocks Friday afternoon as increased fears over the spread of a deadly outbreak of coronavirus rattled markets.
The S&P 500 was on track for its worst day since early October. The benchmark index was also on course to snap a two-week winning streak.
The sell-off followed news that a Chicago woman has become the second US patient diagnosed with the new virus from China. Health authorities worldwide have been taking measures to contain and monitor the coronavirus outbreak.
“It really is a reaction to the widening nature of what’s going on with the coronavirus,” said Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management. “People are concerned about, ultimately, the impact on Chinese growth and perhaps global growth.”
Drugmaker Bristol-Myers Squibb led the slide in health care stocks, shedding 4.2%. Health insurers also fell. UnitedHealth Group dropped 2.2% and Amgen lost 3.4%.
Banks and other financial sector companies also took heavy losses, with credit card issuers among the biggest decliners. Discover Financial Services tumbled 10.1% and Synchrony Financial slumped 9.8%.
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% and American Airlines dropped 5.6%. Cruise line operator Carnival fell 4.4%.
The price of US crude oil fell 2.9%, dragging down energy
Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, Jan 22. Healthcare companies led a broad slide in US stocks Friday afternoon as increased fears over the spread of a deadly outbreak of coronavirus rattled
markets. (AP)
stocks. National skidded 5%.
Utilities were holding on to a slight gain as investors shifted money into safe-play, high-dividend stocks and US government bonds.The surge
Oilwell Varco
in bond-buying send yields lower. The yield on the 10-year Treasury note fell to 1.67% from 1.74% late Thursday, a big move.
Investors continued to dig through the latest batch of company earnings
reports, including strong results from chipmaker Intel and American Express. Next week is shaping up as the busiest week for earnings reports, with roughly 40% of the companies in the S&P 500 due to issue
their results for the last three months of 2019.
The S&P 500 index fell 1.1% as of 2:50 pm Eastern time. The Dow Jones Industrial Average dropped 226 points, or 0.8%, to 28,933. The
Nasdaq lost 1.1%. The Russell 2000 index of smaller company stocks slumped 1.8%.
European markets closed with solid gains, helped by a report that showed improvement in manufacturing activity. Germany’s DAX jumped 1.4% and the CAC 40 in France rose 0.9%
Markets were closed in Shanghai and the rest of mainland China, South Korea, Malaysia and Taiwan. Japan’s Nikkei and Hong Kong’s Hang Seng edged higher.
The number of confirmed coronavirus cases has risen to 850 and at least 25 people have died. The Centers for Disease Control said over 2,000 returning travelers had been screened at US airports and 63 patients in 22 states were being tested.
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.
Intel surged 7.7% after the chipmaker blew past Wall Street’s fourth-quarter profit forecasts. The company cited demand for cloudcomputing as the key reason for the solid financial results.
The company gave investors an upbeat forecast for the first quarter, which helped inject some confidence into the broader market for chips.
Broadcom rose 0.4% after signing supply deals with Apple that could bring in up to $15 billion in revenue. The chipmaker said it will supply wireless components to the iPhone maker.
American Express rose 1.9% after the credit card issuer and global payments company beat Wall Street’s fourth-quarter profit forecasts.