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U.S. Stocks Pull Back Sharply On Second U.S. Case Of Coronavirus

wallstreet july24 24jan20 lt

After failing to sustain an initial move to the upside, stocks showed a significant downturn over the course of the trading session on Friday. The major averages pulled back well off their early highs and firmly into negative territory.

The major averages climbed off their worst levels going into the close but remained stuck in the red. The Dow fell 170.36 points or 0.6 percent to 28,989.73, the Nasdaq slid 87.57 points or 0.9 percent to 9,314.91 and the S&P 500 slumped 30.07 points or 0.9 percent to 3,295.47.

With the drop on the day, the major averages also moved lower for the holiday-shortened week. The Dow tumbled by 1.2 percent, the S&P 500 dropped by 1 percent and the Nasdaq fell by 0.8 percent.

The pullback on Wall Street came after the Centers for Disease Control and Prevention confirmed the second case of the Chinese coronavirus in the U.S.

The CDC said the patient, a woman in her 60s, recently returned from a trip to Wuhan, China, and is currently doing well and in stable condition.

The public health agency said another sixty-three patients in twenty-two states are being monitored for signs of infection.

The news led to a resurgence in concerns about the impact of the coronavirus outbreak after the World Health Organization helped tamp down worries on Thursday by saying it is too early to declare the situation a global health emergency.

The markets initially benefited from a positive reaction to earnings news from big-name companies like Intel (INTC) and American Express (AXP).

Shares of Intel surged up by 8.1 percent after the semiconductor giant reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Intel also provided upbeat guidance for the current year and said its board of directors approved a five percent cash dividend increase.

American Express also ended the day notably higher after the financial services giant reported better than expected fourth quarter results.

Sector News

Energy stocks turned in some of the market's worst performances on the day amid a continued nosedive by the price of crude oil. Crude for March delivery tumbled $1.40 to $54.19 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 3 percent, the NYSE Arca Natural Gas Index slumped by 2.2 percent and the NYSE Arca Oil Index slid by 1.3 percent.

Substantial weakness also emerged among biotechnology stocks, as reflected by the 2.1 percent loss posted by the NYSE Arca Biotechnology Index.

Steel, banking and healthcare stocks also saw notable weakness, while gold stocks moved higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved modestly higher, with several major markets closed for the Lunar New Year holidays. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index crept up by 0.1 percent and 0.2 percent, respectively.

Meanwhile, the major European markets showed strong moves to the upside on the day. While the French CAC 40 Index advanced by 0.9 percent, the U.K.'s FTSE 100 Index jumped by 1 percent and the German DAX Index surged up by 1.4 percent.

In the bond market, treasuries moved significantly higher over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.9 basis points to 1.681 percent.

Looking Ahead

Any news on the coronavirus front is likely to remain in focus next week, potentially overshadowing the Federal Reserve's monetary policy announcement. The Fed is widely expected to leave interest rates unchanged.

A slew of U.S. economic data is also scheduled to be released next week, including reports on new home sales, durable goods orders, consumer confidence, pending home sales, personal income and spending.

On the earnings front, 3M (MMM), Pfizer (PFE), AT&T (T), Boeing (BA), General Electric (GE), Microsoft (MSFT), Tesla (TSLA), Coca-Cola (KO), UPS (UPS), Amazon (AMZN), and Exxon Mobil (XOM) are just a few of the big-name companies due to report their quarterly results next week.

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