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Stocks - Dow Plunges 1,190 Points in Brutal Virus Selling

Stock Markets Feb 27, 2020 04:44PM ET
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By Yasin Ebrahim

Investing.com - Stocks plunged in late selling Thursday as fears of a global pandemic intensified.

The S&P is on pace for its worst weekly loss since the Financial Crisis as investors feared a jump in coronavirus infections in the U.S. could derail economic growth. The S&P 500 closed down. 4.4%,

The Dow Jones Industrial Average was down nearly 1,200 points, or 4.4% and Nasdaq Composite slumped 4.6%.

As the coronavirus epidemic widens globally, with new infections reported in Europe, U.S. and the Middle East, investor sentiment on stocks continues to sour, triggering a wave of selling on Wall Street.

In the U.S., California Gov. Gavin Newsom said the state is monitoring at least 8,400 people for Covid-19, with 28 people confirmed to have contracted the virus.

Just a day earlier, the CDC confirmed the first infection to a patient in California who did not have “relevant travel history or exposure to another known patient,” stoking fears health authorities would struggle to contain the outbreak. In Italy, the cases continue to mount, surging to 650 from 520 cases reporting this morning.

With travel and tourism expected to be among the worst hit by the outbreak, traders upped bearish bets on jet fuel demand, and by extension, oil prices, keeping energy stocks firmly on the back foot.

Tech also played an influential role in the broader sell-off, paced by chip stocks, which fell 4.6% on the day.

Mega-cap FANG stocks also extended losses, with Netflix (NASDAQ:NFLX) unable to hold onto a bid earlier in the day despite expectations that prolonged periods of self- quarantine among the infected could boost user activity on the streaming platform.

Facebook, meanwhile, (NASDAQ:FB) canceled its annual F8 software developer conference, citing concerns about the outbreak.

A flight to safety, pushed Treasury yields to record lows and put banking stocks in the eye of the storm.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) fell sharply as the 10-Year Treasury yield ended the day just above record intraday lows of 1.24%.

Falling bond yields tends to stifle net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.

But it wasn't all gloom as Etsy and Square (NYSE:SQ) rallied on better-than-expected earnings.

Etsy (NASDAQ:ETSY) popped 14% higher following a beat on both the top and bottom lines. While Square (NYSE:SQ) pared gains to end 3% higher after it topped quarterly earnings estimates underpinned by a rise in its users.

But it wasn't all gloom as Etsy and Square (NYSE:SQ) rallied on better-than-expected earnings.

Etsy (NASDAQ:ETSY) popped 14% higher following a beat on both the top and bottom lines. While Square (NYSE:SQ) pared gains to end 3% higher after it topped quarterly earnings estimates underpinned by a rise in its users.

Stocks - Dow Plunges 1,190 Points in Brutal Virus Selling
 

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Comments (49)
Jason Patcher
Jason Patcher Feb 28, 2020 7:21AM ET
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play the action, buy/sell same thing and cover after large moves...
Daniel Melendez
Daniel Melendez Feb 28, 2020 3:56AM ET
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oh yea so that pipe dream Medicare for all, doesn't seem like such a pipe dream after all
ATOMIQ ILYA
ATOMIQ ILYA Feb 28, 2020 2:43AM ET
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Btfd!
Anthony Ab
Anthony Ab Feb 28, 2020 2:31AM ET
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I only see opportunities to buy more stocks at a lower price once it calm down.
Daniel Melendez
Daniel Melendez Feb 28, 2020 1:56AM ET
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oh yea so that pipe dream Medicare for all, doesn't seem like such a pipe dream after all
Chris Sundo
Chris Sundo Feb 28, 2020 1:43AM ET
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Seeing futures so low at this point means to me it's gonna be a WashOut low tomorrow, Friday, at Month End = Week-End. Good luck timing this one :)
Chris Sundo
Chris Sundo Feb 28, 2020 1:40AM ET
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Canada has free for all medical care, how nice, while the financially leveraged and agile Canadian employers pay an Employer Health Tax, effective 2020 January 1st. It's big ******into Employers' money, but at least it frees up the financially strapped Canadian population.
Chris Sundo
Chris Sundo Feb 28, 2020 1:40AM ET
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' *** ' was stated as 'bit^e'. Dunno why they cut it out. As in the gov't is bit'ing the employers into their pocketbook with this employer health tax.
TJ Blohm
TJ Blohm Feb 28, 2020 1:26AM ET
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would be nice if we had universal health care in the US and not millions of underinsured folks taking a chance they merely have the flu to avoid a costly Dr visit
Van Doza
Van Doza Feb 28, 2020 1:26AM ET
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Government is not God; expecting government to be as God is why government is failing in its duty. Lincoln said it best in 1863: "...government of the PEOPLE, by the PEOPLE and for the PEOPLE...".
Van Doza
Van Doza Feb 28, 2020 1:26AM ET
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Kennedy spoke similarly in 1960: "...ask not what your country can do for you; but ask what you can do for your country". The idea is to look to your government as a last priority.
TJ Blohm
TJ Blohm Feb 28, 2020 1:26AM ET
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sure let me just fire up my spare immunology lab I have in my garage so I can cure myself if I get COVID
Carl Axness
Carl Axness Feb 28, 2020 1:24AM ET
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When Trump says it is under control, and puts a political appointee in charge, you know the damage will be major.
Chris Sundo
Chris Sundo Feb 28, 2020 12:44AM ET
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Tmr, Friday, is the MONTH END and WEEKend. Thus extra important to bring the markets down to technical boundaries. Thus March 1'st would be better for a bounce, at least.
 
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