US markets tumble as coronavirus fears mount

Andrew Cummings
February 22, 2020

U.S. stocks were little changed on Thursday as a rise in the number of coronavirus cases outside China raised more concerns about the global impact of the epidemic, while a multi-billion dollar buyout deal for E*Trade Financial Corp boosted shares of the online discount brokerage.

Meanwhile, citing that the latest coronavirus reports saying the number of newer cases had begun to drop which meant the outbreak had reached its plateau or threshold level and started off a phase of decline, a portfolio manager at Kingsview Investment Management in Chicago, Paul Nolte said on Wednesday's (February 19th) Wall St.

The Dow closed down 227 points, or 0.8%.


U.S. and European shares staged a pointy turnround, with Wall Avenue's most important equities gauges tumbling greater than 1 per cent in late morning commerce. The Dow and S&P 500 are both down 1.5% for the week. The Nasdaq Composite was down 136.59 points, or 1.40%, at 9,614.38. Over 800 new cases were reported, with South Korea announcing 52 new cases, taking its total to 150.

In a note to clients, analyst Peter Oppenheimer said investors may be underestimating the impact of the novel disease. In turn, money poured into US bonds, pushing the 30-year rate to an all-time low. The S&P 500 was pressured by a 1.4% drop in the tech sector. "Thus, a near-term hit to corporate earnings now looks unavoidable".

US stock indexes fell on Thursday, dragged down by technology heavyweights, as investors fretted over the rising number of the 2019 novel coronavirus (Covid-19) cases in China and other countries, as well as the potential economic damage from the epidemic.


"Profit warnings linked to the health crisis, as companies are either hit by slowing consumer demand in China or impact on their supply chain, are starting to trickle out with the impact on iPhone sales revealed by Apple earlier this week the most high profile of these".

Traders plowed money into safe havens such as Treasurys and gold on Friday.

Shares held gains following the discharge of minutes from the U.S. Federal Reserve's last policy meeting, which confirmed policymakers had been cautiously optimistic about their ability to hold rates of interest steady this year while acknowledging new risks brought on by the coronavirus epidemic.


"Markets had their first real "shot across the bow" in a few weeks time, with a sudden swift pullback to multi-day lows, which was severe enough to cause some rapid buying of volatility", said Mark Newton, a managing member at Newton Advisors.

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