This post was originally published on this site
By Sruthi Shankar
(Reuters) – U.S. stock indexes fell on Thursday, as mounting worries over a coronavirus outbreak in China, disappointing corporate earnings and weakness in financial stocks prompted investors to hit the brakes after a strong rally this year.
China put on lockdown on Thursday two cities at the epicentre of the coronavirus outbreak that has killed 17 people and infected nearly 600 amid fears the transmission rate will accelerate as hundreds of millions of Chinese travel for the Lunar New Year holidays.
Casino and hotel operators including Wynn Resorts Ltd (O:), Melco Resorts & Entertainment Ltd (O:) and Las Vegas Sands Corp (N:), which draw a large portion of their revenue from China, were down between and 1.0% and 4.2%.
Airline stocks were mostly weaker, with Southwest Airlines Co (N:) slipping 0.7% after reporting a 21% fall in fourth-quarter profit due to Boeing (NYSE:) 737 MAX costs. American Airlines Group Inc (O:) fell 2.9% despite reporting a better-than-expected profit.
“There is some concern that this will turn from an epidemic to a pandemic,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
However, Pavlik added it was a reason for investors to take some profits in an “overbought” market.
Fears of the virus outbreak hitting the global economy have knocked world stock markets off record highs this week even as U.S. earnings reports so far have mostly been in line with expectations.
However, earnings reports on Thursday were largely disappointing. Dragging the Dow lower, insurer Travelers Cos Inc (N:) fell 4.5% following results.
Financial stocks (), down 1.1%, were among the biggest decliners along with the energy () and materials () indexes.
At 9:57 a.m. ET, the Dow Jones Industrial Average () fell 0.60% to 29,010.30. The S&P 500 () shed 0.45% to 3,306.82 and the Nasdaq Composite () was down 0.30% at 9,355.31.
Chipmaker Texas Instruments Inc (O:) fell 1.8% despite forecasting first-quarter revenue above market expectations, but bullish brokerage actions on Micron Technology Inc (O:) and Western Digital Corp (O:) checked losses in the sector.
Apparel maker VF Corp (N:) slumped about 8% after cutting its full-year earnings forecasts on weak demand for its Timberland brand.
Declining issues outnumbered advancers for a 2.73-to-1 ratio on the NYSE and a 2.76-to-1 ratio on the Nasdaq.
The S&P index recorded 25 new 52-week highs and three new lows, while the Nasdaq recorded 29 new highs and 28 new lows.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
