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Wall Street set for steep fall on alarm over fast-spreading virus

Published 02/27/2020, 09:11 AM
Updated 02/27/2020, 09:11 AM
Wall Street set for steep fall on alarm over fast-spreading virus

By Medha Singh

(Reuters) - Futures indicated that the Dow Jones Industrials index would shed more than 300 points at the open on Thursday after the rapid spread of the coronavirus outside China deepened worries about growth and corporate earnings.

The number of new infections in China, the source of the outbreak, was overtaken for the first time by fresh cases elsewhere on Wednesday, most notably in Italy and Iran.

Adding to worries, the U.S. Centers for Disease Control and Prevention confirmed an infection in California in a person who reportedly did not have relevant travel history or exposure to another known patient.

"In the recent week, markets have come to realize that the outbreak is much worse and are now realistically pricing in the impact of the virus on the economy," said Philip Marey, senior U.S. strategist at Rabobank.

"In that sense it's a bit of a catching up from the relative optimism that was there in the beginning when markets thought (the virus) will be contained to China with some minor outbreak outside."

After hitting a record high last week, the S&P 500 (SPX) has declined for five straight sessions and has lost about $1.84 trillion in market capitalization this week alone.

Industry analysts and economists continued to sound the alarm as they assessed the impact of the coronavirus, with Goldman Sachs (NYSE:GS) saying U.S. firms will generate no earnings growth in 2020.

Bank of America (NYSE:BAC) slashed its world growth forecast to the lowest level since the peak of the global financial crisis.

At 8:47 a.m. ET, Dow e-minis were down 334 points, or 1.24%. S&P 500 e-minis were down 40.5 points, or 1.3% and Nasdaq 100 e-minis were down 129.25 points, or 1.46%.

Hotel operator Marriott International (O:MAR) warned of a nearly $25 million hit to its monthly fee revenue due to the epidemic. Its shares fell 2.5% in premarket trading.

All the 30 blue-chip components of the Dow Jones Industrials (DJI) were trading in the red, with Microsoft Corp (O:MSFT), Apple Inc (O:AAPL) and Intel Corp (O:INTC) down between 2.3% and 3.2%.

Gilead Sciences (O:GILD), however, jumped 5% as the drugmaker said it had started two late-stage trials to test its experimental drug in patients with cases of illness caused by coronavirus.

Latest comments

No fall!
Cases outside of China are NOT increasing "fast", and new cases in China are decreasing rapidly. Hey world - freak out and soil yourself much? Good God men - get a grip!
next week full recover the market because it's looking a plan...of Money Power just...
And the plunge protection team will come back after a long vacation to save the Day. They will say that there is a remedy set to go and things will be fantastic
real correction is here
Bernie to the rescue! VenezUSAla here we come! Cant be right if youre left! Maga big in Nov
Trump can save this world. pls president pls save the world
and how will he do it.
  build a wall around USA and stop entry of virus
get on board the trump train market about to break a new record. Cramer will tell you after it happens I will tell you before.
will be going back up. get ready for fed to buy up all the toxic debt market
ya then u better start buying. dont talk only.
please let the the dust settle first. see how the china markets respond to there efforts of combating the covid. this is not a vshape bounce up. it'll be a gradual move up.
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