Wall Street tumbles as virus outbreak raises growth fears
Published on 01 Feb 2020. | Source: theedgemarkets.com
NEW YORK (Jan 31): Wall Street's main averages tumbled more than 1% on Friday, as mixed corporate earnings added to worries over the impact of the coronavirus outbreak on global growth.
The S&P 500 is down more than 2.5% from its record high as supply chain disruptions and travel curbs due to the fast- spreading virus are expected to hit everything from manufacturing to tourism.
The World Health Organization on Thursday declared the coronavirus epidemic a global emergency as it has killed more than 200 people in China, while infecting thousands globally.
Delta Air Lines Inc and American Airlines Group Inc said they would suspend all flights to virus-hit China.
"There is more potential for markets to get affected by the coronavirus than SARS in 2003," said Seema Shah, chief strategist at Principal Global Investors.
"Asset prices are a lot more over-valued coming into 2020, which means they are already very vulnerable to global sentiment."
A gauge of US Midwest manufacturing activity slid to a four-year low in January, with new orders and production tumbling and producers forecasting tepid activity in 2020.
A mixed bag of earnings did little to excite investors.
Amazon.com Inc was among a few bright spots, surging 9% on better-than-expected results for the holiday-quarter that pushed it back into the $1 trillion market capitalization club.
Gains in Amazon helped the consumer discretionary index rise 1.7%, while all other sub-sectors were in the red, with energy stocks tumbling 2.5%.
Oil majors Exxon Mobil Corp and Chevron Corp dropped about 3% after disappointing results.
Growth-oriented sectors such as materials, technology, industrial and financials were down about 2% each.
At 11:36 a.m. ET, the Dow Jones Industrial Average was down 417.36 points, or 1.45%, at 28,442.08.
The S&P 500 fell 42.71 points, or 1.30%, at 3,240.95 and the Nasdaq Composite dropped 105.21 points, or 1.13%, at 9,193.72.
Visa Inc fell 3.7% as it fell short of analysts' estimates for first-quarter revenue and warned of incentives hitting 2020 results.
International Business Machines Corp gained 4% after it named a new chief executive officer.
Declining issues outnumbered advancers for a 3.11-to-1 ratio on the NYSE and a 3.85-to-1 ratio on the Nasdaq.
The S&P index recorded 32 new 52-week highs and 11 new lows, while the Nasdaq recorded 44 new highs and 86 new lows.
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