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Wall Street slides on China virus concerns, Facebook earnings

Stock MarketsJan 30, 2020 02:53PM 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 Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks dropped on Thursday as the coronavirus outbreak raised concerns about damage to the global economy, with what is shaping up to be a lackluster earnings season contributing to the decline.

Shares of the social media giant (O:FB) slumped 5.82% after the company warned of slowing growth as its business matured and it reported a surge in quarterly expenses.

The decline weighed on the S&P communication services index (SPLRCL), which lost 1.36%. Defensive sectors such as utilities and consumer staples, considered safer in times of economic uncertainties, posted modest gains.

The main U.S. stock indexes are on course for their second straight week of declines as the virus has disrupted global travel and forced several companies to suspend operations in China.

The World Health Organization's Emergency Committee is due to reconvene on Thursday to decide whether to declare the virus, which has killed 170 in China and infected 8,100 people worldwide, a global emergency.

The Centers for Disease Control and Prevention reported the first U.S. incident of person-to-person spread of the virus.

"The question in this case is after it runs its course than what are you left with?" said Willie Delwiche, investment strategist at Robert W. Baird in Milwaukee.

"You are left with yields that have moved lower, earnings that are struggling to deliver and an increasingly widespread view the Fed is going to have to come in and cut rates again this year."

The Dow Jones Industrial Average (DJI) fell 99.17 points, or 0.35%, to 28,635.28, the S&P 500 (SPX) lost 14.14 points, or 0.43%, to 3,259.26 and the Nasdaq Composite (IXIC) dropped 38.07 points, or 0.41%, to 9,237.09.

Earnings expectations have been slowly improving for S&P 500 companies, with Refinitiv data showing a 0.7% rise in fourth-quarter profit, compared with a 0.6% decline estimated at the start of the season. But the growth remains modest with the S&P 500 roughly 2% off its record high.

Microsoft Corp (O:MSFT) gained 2.31% after it beat expectations for quarterly earnings, driven by Azure cloud computing revenue growth.

Tesla Inc (O:TSLA) jumped 11.01% after the maker of electric cars posted a second straight quarterly profit as vehicle deliveries hit a record.

Altria Inc (N:MO) slid 5.50% after the tobacco company said it took another $4 billion charge on its investment in Juul Labs Inc.

Package delivery firm United Parcel Service Inc (N:UPS) dropped 6.37% after it forecast full-year earnings below estimates.

Declining issues outnumbered advancing ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored decliners.

The S&P 500 posted 37 new 52-week highs and 14 new lows; the Nasdaq Composite recorded 42 new highs and 91 new lows.

Wall Street slides on China virus concerns, Facebook earnings
 

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Comments (5)
Lewis John
Dubside4Traders Jan 30, 2020 12:33PM ET
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For me, it just seems like market panic. People are caught up in the hysteria of it all. This time next week all will be good and the bulls will return.
TeaMaker Tex
TeaMaker Tex Jan 30, 2020 10:58AM ET
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This virus is much worse than sars but for some reason WS and the media are not acting the same as they did in 2003. Go figure.
A B
A B Jan 30, 2020 10:58AM ET
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My interpretation of the data out is that the rate of mortality among those who contract it is lower than that of SARS
Abhishek Mall
Abhishek Mall Jan 30, 2020 10:54AM ET
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I don't think that CORONA VIRUS can impact so badly on Global Economy. The death data is too smaller than people died in other countries in road accidents daily. Why so much of noise???
Alexis Mendoza
Alexis Mendoza Jan 30, 2020 10:54AM ET
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Its contagious, as road kills are not.
Daniel Menezes
Daniel Menezes Jan 30, 2020 10:54AM ET
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ever though about politics keeping it under wraps so that people don't panic?
James Westmore
James Westmore Jan 30, 2020 10:22AM ET
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The democrats would love nothing more than to have a virus crash the markets. Then they can blame Trump and climate change.
Hai Lu
Hai Lu Jan 30, 2020 10:22AM ET
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MAGA
pinkymini ng
pinkymini ng Jan 30, 2020 9:10AM ET
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fake data
 
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