By Avantika Chilkoti

U.S. stocks opened lower Thursday as conflicting signals in recent days about the containment of the coronavirus outbreak and its potential economic impact subdued investor sentiment.

The Dow Jones Industrial Average fell 69 points, or 0.2%, to 29278 shortly after the opening bell. The S&P 500 dropped 0.1% and the Nasdaq Composite declined 0.2%.

Shares of E*Trade Financial rallied over 24% after Morgan Stanley said it is buying the company in a $13 billion deal. Shares in Morgan Stanley dropped 4%.

China has stepped up efforts to limit the economic impact of the viral outbreak by lowering both short- and long-term lending rates this week. The central bank also plans to offer credit support to businesses hurt by the epidemic, while the government earlier in the week pledged other forms of assistance including technological aid in bolstering supply chains. Despite those steps, investors remain concerned about the extent of the damage to the economy.

All eyes are on the number of casualties and the efforts being made to curtail the virus's spread, as markets ebb and flow with each fresh piece of news on the outbreak, according to Esty Dwek, head of global market strategy at Natixis Investment Managers.

"If anything, the resilience has been surprising, so days like these are expected," Ms. Dwek said.

While fourth-quarter earnings for companies globally are generally viewed to have been better than or in line with expectations, forecasts for 2020 are being tempered by the impact of the coronavirus outbreak.

"Let's not raise the bar too high," Ms. Dwek said. "The full year might not be as strong as we thought it might be two months ago."

Shares in L Brands dropped 5.8% after the company agreed to sell control of Victoria's Secret to a private-equity firm in a transaction that values the lingerie brand at about $1.1 billion.

Marathon Petroleum rallied 3.4% after Bloomberg News reported that Seven & I Holdings, the Japanese company that owns 7-Eleven, is in talks to acquire the company's Speedway gas stations for about $22 billion.

Elsewhere, the pan-continental Stoxx Europe 600 index ticked 0.5% lower. The Shanghai Composite Index closed up almost 1.9%, while Hong Kong's benchmark Hang Seng Index lost 0.2%.

Among European equities, Smith & Nephew was one of the biggest gainers. The medical equipment manufacturer advanced over 7% in London after its fourth-quarter revenue grew faster than expected.

Swiss Re retreated about 5% in Zurich after the reinsurance group reported weaker than expected profit growth for 2019. Telefónica dropped 3.6% after the Spanish telecommunications group swung to a loss for the fourth quarter, after pulling out of some Latin American markets and selling data centers.

In Asia, the Korean won lost over 1% against the U.S. dollar after the number of new coronavirus cases surged to 31 on Thursday, bringing the total number of those infected to 82.

Australia's equity benchmark S&P/ASX 200 meanwhile closed at a record for a second straight day, propelled 0.3% higher on the back of strong corporate earnings.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

(END) Dow Jones Newswires

February 20, 2020 09:54 ET (14:54 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.