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Wall Street falls more slowly as investors parse coronavirus fears

Stock Markets Feb 26, 2020 04:58PM ET
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By Sinéad Carew

New York (Reuters) - The S&P 500 fell for a fifth straight day on Wednesday and while its decline was slower than the last few days, the session was volatile as investors reacted to headlines about coronavirus and sought to gauge its economic fallout.

After rising as much as 1.7% in the morning, the S&P 500 hit a session low after health officials in Nassau County, New York, said they were monitoring 83 people who visited China and may have come in contact with the virus. Still, Governor Andrew Cuomo said the state has had no confirmed cases. {nL2N2AQ192]

Adding to pressure was a warning from U.S. Food and Drug Administration officials that the outbreak was on a path to becoming a pandemic, according to a report.

Earlier, stocks lost ground after Germany said it was heading for a coronavirus epidemic and could no longer trace all cases, and Norway confirmed its first case of the virus. For the first time, the number of new infections outside China overtook those inside the country, the source of the outbreak.

Trading volume was far more active than usual, yet some investors were relieved the slide was slower. The S&P ended down 0.38%, compared with its 6.3% of losses in the previous two sessions.

"The market's default reaction function is when in danger or in doubt, run in circles, scream and shout. That's what we've seen in the past couple of days," said Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, an independent broker-dealer in Waltham, Mass.

"The real story today was that it stopped going down fast ... news came in and the market thought about it and acted appropriately by selling off a little but not too much," said McMillan who estimates that equity investors have priced in two quarters of global economic fallout from the virus.

The Dow Jones Industrial Average fell 123.77 points, or 0.46%, to 26,957.59, the S&P 500 dropped 11.82 points to 3,116.39 and the Nasdaq Composite added 15.16 points, or 0.17%, to end at 8,980.78.

Of the S&P's 11 major sectors energy was the biggest laggard with an almost 3% drop, while technology was its outperformer with a 0.4% gain.

Many investors were cautious about making any big bets without more clarity on the spread of the virus.

"We need to more information before markets have a further correction or get comfortable things won't escalate further," said Jason Draho, head of Americas asset allocation at UBS Global Wealth Management, New York.

"Markets will be very jumpy until there's increasing confidence the virus is abating and that it won't be a global pandemic," Draho said.

President Donald Trump, scheduled to hold a news conference on the coronavirus at 630 P.M. ET (2330 GMT), accused cable TV news channels of presenting the danger from the coronavirus in as bad a light as possible and upsetting financial markets.

The Dow ended the day 8.8% below its recent record close, reached Feb. 12 while the S&P 500 was just under 8% off its record high reached last Wednesday. Nasdaq finished 8.5% below its recent record.

Declining issues outnumbered advancing ones on the NYSE by a 1.94-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored decliners.

The S&P 500 posted 4 new 52-week highs and 50 new lows; the Nasdaq Composite recorded 23 new highs and 237 new lows.

On U.S. exchanges 11.86 billion shares changed hands, below Tuesday's 12.33 billion, but well above the 8.23 billion average for the last 20 sessions.

Wall Street falls more slowly as investors parse coronavirus fears
 

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Comments (28)
Azam Khan
Azam Khan Feb 27, 2020 12:14AM ET
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Strange China was moving market up from 3 days even europe is ok but Americans are shedding their makret themselves
Abhishek Mall
Abhishek Mall Feb 26, 2020 8:21PM ET
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I have never seen such type of fraud news providing website. Last night they were showing news related to Trump press conference over CORONA, now they have removed it.
James Lowe
JLowe Feb 26, 2020 5:52PM ET
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This is a time when you can play like Warren Buffett. What? You didn't? Oh well....
Jack AAA
Jack_A Feb 26, 2020 4:21PM ET
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The real reason for downside is that the bubble is too big and was inflated too much since 2018.
Ben Dover
Ben Dover Feb 26, 2020 4:18PM ET
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Trump need to start looking for a new job.
Philippe Ball
Philippe Ball Feb 26, 2020 4:14PM ET
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You do not resort to draconic measures and instate lockdowns on entire cities and business organizations for a “common flu”.
Christos Rammos
Christos Rammos Feb 26, 2020 4:11PM ET
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No worries just like common flu manipulation to the downside.
James Westmore
James Westmore Feb 26, 2020 3:56PM ET
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https://whatkillsit.com/virus/what-kills-coronavirus/#Coronavirus%20Disinfectants_writeup
Maks Mars
Maks Mars Feb 26, 2020 3:39PM ET
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Time to pop the big bubble lol
Mary Kinney
Mary Kinney Feb 26, 2020 3:39PM ET
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seen beyond meat for the first time in the grocery store...nice try looks like a pile of mush no thanks Hats off veggie lovers
 
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