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Wall Street drops as coronavirus fears, business activity data weigh

Stock MarketsFeb 21, 2020 03:50PM ET
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© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Sruthi Shankar

NEW YORK (Reuters) - U.S. stocks sold off on Friday as a spike in new coronavirus cases in China and other countries and as data showing U.S. business activity stalled in February fueled investors' fears about the economy.

Declines on Friday were led by heavyweights Microsoft Corp (O:MSFT), Amazon.com Inc (O:AMZN) and Apple Inc (O:AAPL) for a second straight day.

The S&P technology index (SPLRCT) dropped 2.4%. Chipmakers, with strong ties to China for revenue, also fell sharply, with the Philadelphia Semiconductor index (SOX) falling 3%.

China reported a jump in new cases on Friday, while South Korea became the latest hot spot with 100 new cases and more than 80 people tested positive for the virus in Japan.

"It's creating a wild card," for companies and others, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "Going into a weekend not so long after the stock market was hitting highs, people are taking some money off the table."

The impact could extend beyond the first quarter, he said.

Apple (O:AAPL) earlier this week warned on sales due to the impact of the virus outbreak.

The worries pushed up Wall Street's fear gauge, the CBOE volatility index (VIX), and caused investors to seek safe-haven assets.

Gold and bond prices rose, while defensive equity sectors - utilities, real estate and staples - all rose.

The IHS Markit Purchasing Managers' index of services sector activity dropped to its lowest level since October 2013, signalling a contraction for the first time since 2016. The manufacturing sector also clocked its lowest reading since August.

The Dow Jones Industrial Average (DJI) fell 262.56 points, or 0.9%, to 28,957.42, the S&P 500 (SPX) lost 39.79 points, or 1.18%, to 3,333.44 and the Nasdaq Composite (IXIC) dropped 189.39 points, or 1.94%, to 9,561.57.

Hopes of monetary easing by major central banks had propelled the benchmark S&P 500 (SPX) and the tech-heavy Nasdaq (IXIC) to all-time highs earlier this week, but the indexes are on course for their first weekly decline in three weeks.

Among other stocks, Dropbox Inc (O:DBX) jumped after it raised its outlook for operating margin, and Deere & Co (N:DE) rose after an unexpected rise in first-quarter profit.

Sprint Corp (N:S) climbed 5.7% as it announced new merger terms with T-Mobile US (O:TMUS) that would reduce the stake of major Sprint shareholder SoftBank. T-Mobile shares dipped 0.9%.

Declining issues outnumbered advancing ones on the NYSE by a 2.13-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 70 new highs and 54 new lows.

Wall Street drops as coronavirus fears, business activity data weigh
 

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Comments (14)
ATOMIQ ILYA
ATOMIQ ILYA Feb 21, 2020 5:11PM ET
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Btfd!
Ron Warren
Ron Warren Feb 21, 2020 5:11PM ET
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good luck with that.
Azam Khan
Azam Khan Feb 21, 2020 2:29PM ET
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Strange thing is that China news is handling USA market very strange.
David David
David9 Feb 21, 2020 2:29PM ET
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When China Roars, worldwide markets crumbles.
Suman Jutur
Suman Jutur Feb 21, 2020 2:29PM ET
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that is why US markets are roaring largely ignoring China. I understand your love for China but boasting has its limits.
Triplicis Mundi Summum
Triplicis Mundi Summum Feb 21, 2020 2:29PM ET
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Suman Jutur Mr. Wong continues to smoke the commie bong.
Ivan Couto Jr
Ivan Couto Jr Feb 21, 2020 1:38PM ET
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Hey, DO NOT SELL. Fed’s REPOrona daily purchases and fully infected CoronALGOS will continue the meltup until all die
Azam Khan
Azam Khan Feb 21, 2020 11:07AM ET
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Buy nasdaq at 482 and average it out at 389 it will go up
Francesco Trader
Francesco Trader Feb 21, 2020 10:54AM ET
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Shorting till summer at least
Edward Chong
Edward Chong Feb 21, 2020 10:54AM ET
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haha are u serious !
David David
David9 Feb 21, 2020 10:54AM ET
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China will give you a spanking if you try to short.
Triplicis Mundi Summum
Triplicis Mundi Summum Feb 21, 2020 10:54AM ET
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David David China spanked itself with all this coronavirus shenanigans.
Suman Jutur
Suman Jutur Feb 21, 2020 9:22AM ET
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China is becoming a nuisance
Mehrdad Gh
Mehrdad Gh Feb 21, 2020 9:22AM ET
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be wait
Patrick Higdon
Patrick Higdon Feb 21, 2020 8:50AM ET
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Markets do X "as" (Insert current headline) is you're formula for market "news." It was the trade war forever, then the impeachment, now the coronavirus.
Silverbug 19
Silverbug 19 Feb 21, 2020 8:45AM ET
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King Dollar of massive debt.
Mart Bab
Rubberduck1973 Feb 21, 2020 8:38AM ET
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This was all sooooooooo predictable. Even for an amateur like me. Why the suprice? Proof of a bubble. Lots of downfall ahead.
James Westmore
James Westmore Feb 21, 2020 8:35AM ET
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Good point! The flu virus kills way more every year.
Mart Bab
Rubberduck1973 Feb 21, 2020 8:35AM ET
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You are only focusing on the amount infected. Pay attention to the measures taken and affect of the measures. That’s what is concerning.
James Westmore
James Westmore Feb 21, 2020 8:34AM ET
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Coronavirus = buy the dips.
Mns Smn
Mns Smn Feb 21, 2020 8:28AM ET
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Three differences....we dont know enough about this virus and how it will mutate, we know it spreads fast but not exactly how, and the mortality rate is higher than seasonal flu. Thats enough to make this virus highly disconcerting.
Jenia Golbstein
Jenia Golbstein Feb 21, 2020 8:25AM ET
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just another stock discount
ATOMIQ ILYA
ATOMIQ ILYA Feb 21, 2020 8:25AM ET
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True
Me comment
Me comment Feb 21, 2020 8:17AM ET
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Coronavirus still no where near the problem as the flu or pneumonia are every year but no panic over them.
jonas Örnhede
Jonsey Feb 21, 2020 8:17AM ET
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that's why 780 million people are in some sort of qaurantine? just another flu.most ppl underestimate this virus
 
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