(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 (WYNN.O), Melco Resorts & Entertainment Ltd (MLCO.O) and Las Vegas Sands Corp (LVS.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 (LUV.N) slipping 0.7% after reporting a 21% fall in fourth-quarter profit due to Boeing 737 MAX costs. American Airlines Group Inc (AAL.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 (TRV.N) fell 4.5% following results.

Financial stocks .SPSY, down 1.1%, were among the biggest decliners along with the energy .SPNY and materials .SPLRCM indexes.

At 9:57 a.m. ET, the Dow Jones Industrial Average .DJI fell 0.60% to 29,010.30. The S&P 500 .SPX shed 0.45% to 3,306.82 and the Nasdaq Composite .IXIC was down 0.30% at 9,355.31.

Chipmaker Texas Instruments Inc (TXN.O) fell 1.8% despite forecasting first-quarter revenue above market expectations, but bullish brokerage actions on Micron Technology Inc (MU.O) and Western Digital Corp (WDC.O) checked losses in the sector.

Apparel maker VF Corp (VFC.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.

Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta


Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

IMF warns coronavirus recession could be worse than 2009

It further warned that many emerging markets could be particularly severely hit by the economic downturn, and advocated “extraordinary fiscal actions” and measures to ease monetary policy. Still, according to the organization, the recovery from a looming economic disaster could…

U.S. markets should stay open despite turmoil, says securities regulator

WASHINGTON/NEW YORK (Reuters) – U.S. markets should stay open despite intense volatility, the head of the U.S. securities regulator said on Monday, quashing industry speculation that the government might shut down the country’s exchanges to stop a plunge in stock…

Fitness apps shaping up for big momentum

Self-isolation turning living rooms into gyms It was 7 am on a Monday morning. Instead of commuting to work, 26-year-old Liu Yang turned on her laptop, did a few stretches and waited for an online fitness training course available through…

US stocks follow global markets lower over virus concerns

NEW YORK — U.S. stocks tumbled following a sell-off in markets in Europe and Japan Monday after China announced a sharp rise in cases of a deadly new virus that threatens to crimp global economic growth. Every major U.S. index…