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

Stock MarketsJan 24, 2020 04:38PM ET
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© 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.

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

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

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Comments (11)
Jon Benton
Jon Benton Jan 24, 2020 5:31PM ET
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Markets being hit by " Flying Bull" , not v i rus excuse !!!
Andrew Paeth
Andrew Paeth Jan 24, 2020 5:18PM ET
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Seems strange that Gold has barely edged up here this week.
Money Tree Tops
Money Tree Tops Jan 24, 2020 3:17PM ET
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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
Joe Messeri
Joe Messeri Jan 24, 2020 1:27PM ET
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Got to love China a nation that can make 30 million people disappear if has to and no one would ever even motice
Jay Ishere
Jay Ishere Jan 24, 2020 1:13PM ET
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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
Money Maker
Money Maker Jan 24, 2020 12:56PM ET
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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.
David Chiou
David Chiou Jan 24, 2020 12:56PM ET
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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.
David Chiou
David Chiou Jan 24, 2020 12:52PM ET
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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.
John Smith
John Smith Jan 24, 2020 12:39PM ET
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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.
Azam Khan
Azam Khan Jan 24, 2020 12:39PM ET
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Right, there are certain point where market need to be correct if it always go up then it would have reached to 50000.
Azam Khan
Azam Khan Jan 24, 2020 12:26PM ET
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This news have nothing to do with nasdaq dont get upset nasdaq will go up its just a correction not a virus
Ibnu Adam
Ibnu Adam Jan 24, 2020 12:26PM ET
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hahahaha
Azam Khan
Azam Khan Jan 24, 2020 12:23PM ET
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Go for buy on nasdaq
Azam Khan
Azam Khan Jan 24, 2020 12:23PM ET
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The most stupid news i have ever heard come on investing guys i dont expect this kind of news from you guys
 
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