By Anna Hirtenstein
Stocks and crude oil tumbled Monday on concerns about China's viral outbreak, as the detection of infected patients in the U.S., Australia and France led to escalating concerns about its containment and potential economic impact.
The Dow Jones Industrial Average fell 424 points, or 1.5%, and the S&P 500 dropped 1.4%. The technology-heavy Nasdaq Composite lost 1.8%. All three indexes were poised for their worst day since October.
The selloff was broad-based. Ten of 11 sectors in the S&P 500 slumped, as did 28 of the 30 Dow components. Utilities stocks, often considered a safety play because of their steady dividend yields, were the group to rise on the day.
Uncertainty surrounding the virus jolted a market that had been unusually calm: The S&P 500 hasn't closed up or down 1% in a single trading session since mid-October, one of its longest such streaks since 1969.
The coronavirus has infected more than 2,700 people and killed at least 80, mostly in China's Hubei province, with public-health officials warning that it is growing more contagious. The number of U.S. cases has risen to five and the government is working to evacuate American citizens from the epicenter.
"It's unclear how far it could have potentially spread," said Georgina Taylor, a multiasset fund manager at Invesco. "If it turns into a global health issue, that's really the next piece of information that would worry us."
As investors bid down stocks, they headed into haven assets such as government bonds and gold. The benchmark 10-year Treasury yield fell to 1.615%, on pace for its lowest closing level since October.
U.S. stocks are poised for swings as the Cboe Volatility Index, or VIX, which measures expected moves in the S&P 500 index, has climbed to its highest level since the start of this year.
In addition to developments around the virus, investors will be watching a big week of earnings reports from U.S. companies. With about 17% of S&P 500 companies having reported for the fourth quarter, 70% have beat analysts' earnings expectations, according to FactSet. Still, analysts are expecting earnings for the S&P 500 as a whole to drop 1.9% from a year earlier. They expect earnings growth to pick up in the first quarter of 2020.
Investors also will be keeping an eye on the Federal Reserve's meeting Wednesday, though the central bank is expected to hold its benchmark rate steady.
Overseas, Stoxx Europe 600 retreated 2%, led by declines in the U.K. and France. Markets in China, Hong Kong and South Korea were closed Monday for the public holiday. Japan's Nikkei 225 index closed down 2%.
Hotel, cruise and airline stocks fell on concerns that the coronavirus could affect global travel. The Chinese government has imposed restrictions on movement in Hubei province, and the U.S. Centers for Disease Control and Prevention issued a warning to avoid nonessential travel to this part of China.
Wynn Resorts lost 6.1%, due to its large presence in gambling hot spot Macau. Las Vegas Sands was down 6.4%. Marriott International fell 2.9%.
Airlines were also big losers. United Airlines Holdings dropped 5%, and American Airlines fell 6.6%. Delta Air Lines lost 3.9%.
Miners also slumped as investors feared that the virus outbreak could erode China's demand for industrial commodities. Freeport-McMoRan fell 6.6%.
Oil prices slumped by the most in over four months as the virus outbreak threatens to damp economic growth in China, the world's biggest energy consumer. Brent crude, the global benchmark, declined 3.4% before recovering slightly to trade at $58.51 a barrel.
Karen Langley contributed to this article.
Write to Anna Hirtenstein at email@example.com
(END) Dow Jones Newswires
January 27, 2020 10:11 ET (15:11 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.