Stocks Drop on Worries About Virus Outbreak
January 24 2020 - 4:07PM
Dow Jones News
By Avantika Chilkoti and Alexander Osipovich
U.S. stocks dropped Friday on worries the deadly coronavirus
outbreak is spreading.
The Dow Jones Industrial Average fell 141 points, or 0.5%, in
afternoon trading. The S&P 500 and the Nasdaq Composite both
dropped 0.8%.
All three indexes opened Friday morning 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.
The three indexes are set to close the week with losses, ending
a two-week winning streak for the Dow and the S&P and a
six-week winning streak for the Nasdaq. Still, the indexes are
still close to the record highs set earlier this month before
jitters over the Wuhan virus spooked investors.
The crude oil market had its worst week since July as the
widening outbreak threatened to disrupt travel. U.S. oil futures
fell 2.5% to $54.19 on Friday, in their fourth consecutive day of
losses.
Investors bought assets seen as havens. Gold futures gained 0.4%
to settle at $1571.10 a 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 7.7%. 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 2.4% 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," 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 15:52 ET (20:52 GMT)
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