Wall Street drops on coronavirus fears

Marco Green
February 22, 2020

The number of new coronavirus instances fell for the second day in China. Citing statistics, on Wednesday's (February 19th) Wall St.

The blue-chip index closed down 130.52 points, or 0.4%, at 29,217.51.

The S&P 500 posted 30 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 70 new highs and 54 new lows.

The S&P technology index dropped 1.9%. The Nasdaq Composite fared worse, down 1.Four per cent, however coming in from a decline of as a lot as 1.eight per cent.

Sentiment was presently weak after Japan claimed two new deaths and South Korea claimed a rise in new infections.

"The overlying question is the uncertainty over the coronavirus and whether it's going to spread further and impact global economic activity before things stabilize and ultimately get better", said Michael Sheldon, executive director and CIO at RDM Financial Group at Hightower in Westport, Connecticut.

Investors also digested comments from U.S. Federal Reserve Vice Chair Richard Clarida, who showed little alarm about the potential of the coronavirus outbreak to alter the central bank's interest rate policy and said the domestic economy is strong. "Thus, a near-term hit to corporate earnings now looks unavoidable".

The outbreak has already hit U.S. companies exposed to China, such as Apple, while new data from the China Passenger Car Association revealed that automotive sales had plummeted 92% in the first two weeks of February.

US stock indexes fell about 1% on Thursday, dragged down by technology heavyweights, as investors fretted over a rise in the cases of coronavirus and its economic impact.

Apple earlier this week warned on sales due to the impact of the virus outbreak.

Traders plowed money into safe havens such as Treasurys and gold on Friday. On the other hand, the risk-sensitive Technology Index is down 0.25 and the Financials Index, which seems to be underperforming amid a 1.8% drop in 10-year US T-bond yields, is erasing 0.2% in the early trade. Treasury prices and yields move in opposite directions.

In economic data, US initial jobless claims were unchanged at 210,000 for the week ended February 15, the Labor Department said. The Dow also notched its fourth decline in five sessions. "Yet breadth was never down that much even at the height of intraday losses, and ended up positive on the day".

Other reports by Click Lancashire

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