Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

The S&P 500 has worst day since October as virus fears mount

Published 01/24/2020, 04:38 PM
Updated 01/24/2020, 04:38 PM
© Reuters. A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York

© Reuters. A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Stephen Culp

NEW YORK (Reuters) - Wall Street fell in a broad sell-off on Friday, as investors fled equities on growing concerns over the scope of the coronavirus outbreak, capping the S&P 500's worst week in six months.

All three major U.S. stock averages turned sharply negative, with the S&P 500 seeing its biggest one-day percentage drop in over three months after the Centers for Disease Control and Prevention confirmed the second case of the virus on U.S. soil, this time in Chicago.

S&P 500 and Dow wrapped up their worst week since August and the Nasdaq snapped a six-week winning streak.

Market participants kept a wary eye on developments surrounding the coronavirus, which the World Health Organization (WHO) deemed "an emergency in China," having now killed 26 people and infected more than 800 on the eve of the Lunar New Year holiday.

"Markets hate uncertainty and the virus has been enough to inject uncertainty in the markets," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

But some analysts believe the investors were looking for a reason to take money off the table.

"The virus is really more an excuse to take profits right now," said Sam Stovall, chief investment strategist of CFRA Research in New York.

Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, agreed. "The markets are expensive and were looking for a reason to go down, and (the virus) is the excuse to do it."

Intel Corp's (O:INTC) stock surged 8.1% after reporting jumps in data center and cloud computing revenue and forecasting better-than-expected 2020 earnings.

Consumer credit company American Express Co (N:AXP) benefited from a robust U.S. retail sales environment, posting a better-than-expected 9% annual revenue increase. Its stock advanced 2.8%.

Fourth-quarter reporting season is well under way, with 74 companies in the S&P 500 having reported, 68.2% of which have beaten Wall Street estimates, according to Refinitiv data.

Analysts now expect earnings to have contracted by 0.5%, on aggregate, in the October to December quarter.

Next week, a swarm of closely watched results are expected, notably from Apple Inc (O:AAPL), McDonald's Corp (N:MCD), Starbucks Corp (O:SBUX), Tesla Inc (O:TSLA), Amazon.com Inc (O:AMZN), Boeing Co (N:BA), Facebook Inc (O:FB) and Caterpillar Inc (N:CAT), among others.

The Dow Jones Industrial Average (DJI) fell 170.36 points, or 0.58%, to 28,989.73, the S&P 500 (SPX) lost 30.09 points, or 0.90%, to 3,295.45 and the Nasdaq Composite (IXIC) dropped 87.57 points, or 0.93%, to 9,314.91.

Of the 11 major sectors in the S&P 500, all but utilities (SPLRCU) ended the session in the red, with healthcare (SPXHC) and financial (SPSY) suffering the largest percentage losses.

Broadcom Inc (O:AVGO) rose 1.3% after entering an agreement with Apple Inc (O:AAPL) for the supply of wireless components used in its products.

Rivals Skyworks Solutions (O:SWKS) and Qorvo Inc (O:QRVO) were down 4.6% and 4.5%, respectively, on the news.

Declining issues outnumbered advancing ones on the NYSE by a 2.33-to-1 ratio; on Nasdaq, a 2.94-to-1 ratio favored decliners.

The S&P 500 posted 85 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 115 new highs and 62 new lows.

© Reuters. A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York

Volume on U.S. exchanges was 7.96 billion shares, compared with the 7.13 billion average over the last 20 trading days.

Latest comments

Markets being hit by " Flying Bull" , not v i rus excuse !!!
Seems strange that Gold has barely edged up here this week.
By the time Monday comes, there will be more reported cases of the virus. Buying some gold miners by days end for a 3 to 4% return on monday
Got to love China a nation that can make 30 million people disappear if has to and no one would ever even motice
All taken into consideration and placed in the right perspective the drop is an expected over-reaction at a market peak point that offered a good excuse to take some profits off the table and reshuffle positions
Its just another healthy correction. The virus will not damage the markets and even if it does its not the end of the world, so much over reaction.
I do agree for the most part. But, if there are cases of the virus closer to home in North America causing death, I believe the health sector will take a huge hit, which will bring down thr market, causing a panic selloff.
Until more are infected and mortality hits the news in North America, this is all just a pullback. Eventually, the virus will be priced in and market will recover its exuberance.
If 800 people in China being sick would bring down our global economy. Then were in worse shape than we thought. Who are the people writing this stuff. Worse are the people who believe it.
Right, there are certain point where market need to be correct if it always go up then it would have reached to 50000.
This news have nothing to do with nasdaq dont get upset nasdaq will go up its just a correction not a virus
hahahaha
Go for buy on nasdaq
The most stupid news i have ever heard come on investing guys i dont expect this kind of news from you guys
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.