Stocks Drop on Worries About Virus Outbreak

Date : 01/24/2020 @ 7:39PM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 6580.61  -215.79 (-3.18%) @ 4:45PM

Stocks Drop on Worries About Virus Outbreak

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2 Months : From Dec 2019 to Feb 2020

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By Avantika Chilkoti and Alexander Osipovich 

U.S. stocks tumbled Friday on worries the deadly coronavirus outbreak is spreading.

The Dow Jones Industrial Average fell 260 points, or 0.9%, in afternoon trading. The S&P 500 and the Nasdaq Composite both dropped 1.1%.

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 2.7% to $54.09 a barrel, on track for their fourth consecutive losing session, as the broadening virus outbreak threatened to disrupt travel.

Investors bought assets seen as safe havens. Gold futures gained 0.4% to $1572.10 per troy ounce. The yield on the 10-year U.S. Treasury note fell to 1.682%, from 1.739% on Thursday, as investors snapped up government bonds. Bond yields move in the opposite direction from prices. Utilities were the only one of the S&P 500's 11 sectors to be up for the day.

In corporate news, shares of Intel surged 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.

American Express gained 2.3% after the credit-card company's earnings beat analysts' expectations and it gave an optimistic earnings outlook for 2020.

Overseas, the pan-continental Stoxx Europe 600 index climbed 0.9% 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 did so 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% 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.

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 14:24 ET (19:24 GMT)

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


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