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Stocks - Wall Street Extends Losses; CDC Warns Virus Spread 'Might be Bad'

Published 02/25/2020, 01:04 PM
Updated 02/25/2020, 01:07 PM
© Reuters.
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By Yasin Ebrahim

Investing.com – The S&P erased early-day gains Tuesday, resuming the selloff from a day earlier as some on Wall Street cautioned against buying the dips amid a warning from health authorities about the spread of the coronavirus.

The S&P 500 slumped 1.59%, Nasdaq Composite lost 1.21% and the Dow Jones Industrial Average fell 1.60%.

"I would continue to resist, as hard as it is, to simply buy the dip," said Mohamed El-Erian, Allianz (DE:ALVG) chief economic advisor, as new outbreaks in Asia, Europe and the Middle East stoked fears of a coming pandemic.

The Centers for Disease Control and Prevention (CDC) confirmed 53 cases in the U.S. A spate of infections were identified across the Middle East, including two more cases in Oman and six more in Bahrain, while in Europe Switzerland confirmed its first case.

El-Erian's cautious note comes as the World Health Organization warned countries to prepare for the coronavirus, while the CDC said the American public should "prepare for the expectation that this (Covid-19) might be bad."

With fears running high the impact from the virus on global growth could be worse than feared, investors abandoned stocks, with energy, in particular, coming under pressure on demand concerns.

The International Energy Agency's outlook on global oil demand growth has fallen to its lowest level in a decade, IEA Executive Director Fatih Birol said on Tuesday, warning of further demand pressures due to the impact of the coronavirus outbreak.

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The selloff in banking stocks continued, paced by an ongoing slump in Treasury yields as investors piled into safe havens, offsetting an improved outlook on trading revenue from JPMorgan Chase (NYSE:JPM).

JPMorgan) said it expects to post a "mid teens" increase in trading revenues for the first quarter.

On the earnings front, Home Depot (NYSE:HD) rose 1% after its fourth-quarter results topped Wall Street estimates on both the top and bottom lines.

Shake Shack's (NYSE:SHAK) fiscal fourth-quarter revenue missed analysts' estimates and guidance also fell short, sending its shares down 13%.

HP (NYSE:HPQ), meanwhile, climbed about 6%, underpinned by fiscal first-quarter earnings that beat consensus estimates and a new plan to return capital to shareholders.

Elsewhere, Tesla rival Nio (NYSE:NIO) rose 13% despite paring some gains, as investors cheered news the cash-strapped Chinese electric automaker was in talks to raise funds and build new factories in China.

Latest comments

Boring stuff. The media hype over what is simply one of the latest cold/flu virus is ridiculous. Stop acting like scared children. Watch out for china (or anyone) pawning off their bad behavior/bad data on on a stupid virus. that's silly playing Curly Howard "i'm a victim of circumstance!" "its the flu's fault!" Turn off the mass media. Stop believing in the bogey man stories. Act normal. Done. some people caught a cold/flu. Boring stuff. Next??
it's not a big deal. the summer heat will ******the virus according to what I heard from our president.
Btfd!
just selling, because everyone knows it's a bubble and just popped.
it's not a big deal. the summer heat will ****the virus according to what I heard from our president.
In the USA during the 2018–2019 influenza season, the CDC estimates that influenza was associated with more than 35.5 million illnesses, more than 16.5 million medical visits, 490,600 hospitalizations, and 34,200 deaths. This coronavirus is nothing in comparison. The media is blowing this out of proportion and for what reason?
There are intensive resources required to cure mild to severe cases which can overrun an unprepared health care system, there is difficulty preventing spread because patients can be assymptomatic for long periods and still be infectious, the tests are only widely available in 3 states and as more and more countries are involved it becomes difficult to prevent new cases from entering the country.. and with very rigid and severe population controls the virus is still a 10 fold higher mortality rate than influenza.. with poor control ... who knows... and also fragile economies like Italy's are strained supply chains broken, lives disrupted,
Because you are comparing wrong. 35.5M covid 19 infections would result in over a million deaths. How does your 34k deaths sound now in comparison. Not to mention at a R0 of closer to 3 vs the flu's 1.3, you can expect multiples of that 35.5M infection count. A 0.1% fatality rate of the flu is nothing in comparison to the 2-3% fatality rate of covid19. So before you start throwing out figures in comparison, maybe try to dig a little further to actually compare.
I'm usually right there with you on the media. the media isn't shutting down towns and cities all across the world though. they aren't evacuating people out of china either. Is the media focusing on it too much? maybe. but they aren't what's causing the stock market to go down. 25 percent of the goods in the world come from china and production there is operating at half. china makes the world go round. unfortunately.
I'm so scared
I am sorry.. long distance hug. keep vigilant and was your hands, stay away from large crowds and hope for the best...
wash not was
lmao almost a dozen case in the US and those boarded on the same plane seems to be okay, meaning the spread isn't likely that easy. in China where it is culturally mandated where ppl share food among everyone on the same dining table is easy.there is no way it'll be in similar scale in the US.
30, 000 a year die in the US just by the flu. LMAO
Bunch of cowards selling because of a virus they don't know anything at all.
its algo trading in investment banking if price reach certain level they sell automatically, and other banks as well along with them hedge, mutual and pension funds. and the last one's are retail traders and investors.
Twitter is getting rumors of Reuters employees in NYC having Coronavirus? Let's pray this isn't true
Stay tuned. I have hundreds of journalists working on this case
0.9% of the people die. I don't know is it enough to justify what is going on to the markets?
that's quite naiive. You're assuming that China is truly reporting. If the mortality rate is actually below half of seasonal flu and otherwise characterized by mild sniffle-symptoms, would China have shut down it's major cities and economy? why? to stop it from spreading to the west? This is so ugly, all the governments and especially the WHO, are lying through their teeth, because they aren't prepared to cope, much less prevent. Need proof? First WHO said ' not air-borne', now the spokespeople are wearing masks at news conferences. Then WHO said 14 day incubation but now there's confirmed cases of 27 day incubation. So, does WHO err on safe side and say "30 day quarantine is recommended"? No, they're letting folks mingle after 2 weeks. Hmmm. Sounds like 'lost in a bubble' political babble to me
not a out the deaths it's about the quarantines and loss to gpds
By the numbers released if they are true it’s currently over 3% but it’ll probably run closer to 5- 10% before it’s over? But I agree all about fear and the loss of travel and manufacturing but should slow up human caused climate change
This virus will definetly ******me... Causing ******heartattack..
eeeyy...they world war 3 memes anyone ?
they cannot act quick enough. Nor can the Fed prevent revenue loss in companies with high exposure to COVID impacted goods and services. Most of the losses cannot be made up. But markets will get a basic reset once fears subside. We know forecasts will be cut along with actual results. From that bottom, the sky will be the limit. The run will begin anew. This was needed as current prices were not sustainable
shorts be careful. Fed might say or do something.l if things get too nasty
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