Stocks Turn Lower on Worries About Virus Outbreak
January 24 2020 - 11:54AM
Dow Jones News
By Avantika Chilkoti and Alexander Osipovich
U.S. stocks came under pressure Friday on worries the deadly
coronavirus outbreak is spreading.
The Dow Jones Industrial Average and the Nasdaq Composite
slipped 0.1% in morning trading, while the S&P 500 fell
0.3%.
All three indexes opened with gains, but pulled back after
health officials confirmed a second U.S. case of the virus that has
killed more than two dozen people in Asia, sickened hundreds more
and led to a quarantine of the Chinese city of Wuhan.
Energy was among the worst-performing sectors of the S&P
500, pulled down by slumping prices for crude oil. U.S. oil futures
fell 2.3% to $54.29 a barrel as the widening virus outbreak
threatened to disrupt travel.
Technology was the index's best-performing sector, buoyed by
gains in semiconductor stocks.
Shares of Intel surged 8.8%. The chip maker late Thursday
reported fourth-quarter earnings that beat expectations following
an upswing in personal-computer shipments and robust demand for
chips to power data centers. Its rival Broadcom gained 2.4% after
reporting that it had secured multiyear supply agreements to
provide wireless components for Apple products.
American Express gained 2.8% after the credit-card company's
earnings beat analysts' expectations.
Overseas, the pan-continental Stoxx Europe 600 index climbed 1%
on fresh economic data that signaled a halt to the slowdown in the
German manufacturing sector.
Preliminary data on purchasing managers' indexes, closely
watched measures of business activity, suggested that the
manufacturing sector in the eurozone -- and Germany, in particular
-- fared better than the market had expected in January. Factories
in the region saw export orders begin to stabilize after a long and
deep decline, and while the manufacturing sector continued to
contract, it was at a slower pace than previous months.
"The markets are reacting to the signs of bottoming in German
manufacturing," said Mike Bell, global market strategist at J.P.
Morgan Asset Management. "It's pretty key because the big question
on everyone's mind has been: is there recession risk? And the most
obvious risk there was a downturn in European manufacturing."
U.K. stocks rose, with the FTSE 100 index climbing 1.2% after
the latest purchasing managers index data was better than analysts
expected.
The readings are "the surest sign yet that the economy has
turned a corner since the election," and would likely mean the Bank
of England holds off cutting rates later this month, analysts at
Capital Economics said in a note.
The yield on the 10-year U.S. Treasury note fell to 1.701%, from
1.739% on Thursday, as investors bought government bonds. Bond
yields move in the opposite direction from prices.
In Asia, Japan's Nikkei 225 benchmark closed up 0.1% and Hong
Kong's Hang Seng finished the day up almost 0.2%. Chinese and
Korean markets were closed for public holidays.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and
Alexander Osipovich at alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
January 24, 2020 11:39 ET (16:39 GMT)
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