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U.S. Stocks Remain Firmly Negative In Afternoon Trading

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After falling sharply at the start of the session, stocks continue to see substantial weakness in afternoon trading on Monday. With the sell-off on the day, the major averages are extending the notable pullback seen last Friday.

The major averages have climbed off their early lows but remain firmly in negative territory. The Dow is down 348.80 points or 1.2 percent at 28,640.93, the Nasdaq is down 136.48 points or 1.5 percent at 9,178.43 and the S&P 500 is down 39.49 points or 1.2 percent at 3,255.98.

Growing concerns about the coronavirus outbreak in China contributed to the initial drop on Wall Street amid worries about the impact on the global economy.

Chinese officials said the death toll from the new coronavirus has jumped to 81, with more than 2,800 people infected globally.

The continued spread of the coronavirus is likely to weigh on travel, tourism and hospitality stocks as well as companies with major exposure to China.

Some traders are likely taking the opportunity created by the outbreak to cash in on some of the recent record gains in the markets, potentially exacerbating the pullback.

On the U.S. economic front, the Commerce Department released a report unexpectedly showing a modest decrease in new home sales in the month of December.

The report said new home sales fell by 0.4 percent to an annual rate of 694,000 in December from a downwardly revised 697,000 in November.

The drop surprised economists, who had expected new home sales to surge up by 1.5 percent to an annual rate of 730,000 in December from the 719,000 originally reported for the previous month.

Revised data also showed new home sales slumped by 1.1 percent in November compared to the previously reported 1.3 percent jump.

Sector News

Most of the major sectors have moved to the downside on the day, reflecting broad based weakness on Wall Street.

Oil service stocks continue to turn in some of the market's worst performances, with the Philadelphia Oil Service Index plunging by 4.8 percent to a two-month intraday low.

The sell-off by oil service stocks comes amid a continued nosedive by the price of crude oil, as crude for March delivery is tumbling $1.41 to $52.78 a barrel.

Substantial weakness also remains visible among steel stocks, as reflected by the 3.7 percent slump by the NYSE Arca Steel Index. The index has also fallen to its lowest intraday level in two months.

Semiconductor, computer hardware, natural gas and chemical stocks are also seeing considerable weakness in afternoon trading.

Other Markets

In overseas trading, Japanese stocks fell sharply during trading on Monday, as most other markets in the Asia-Pacific region were closed for holidays. Japan's Nikkei 225 Index plunged by 2 percent.

The major European markets also showed significant moves to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 2.3 percent, the German DAX Index and the French CAC 40 Index both plummeted by 2.7 percent.

In the bond market, treasuries have moved substantially higher amid the sell-off on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.1 basis points at 1.610 percent.

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