US Stocks Close Lower 02/20 16:11
U.S. stocks spun lower in a dizzying day of trading Thursday as worries
about the viral outbreak that started in China knocked the S&P 500 off its
NEW YORK (AP) -- U.S. stocks spun lower in a dizzying day of trading
Thursday as worries about the viral outbreak that started in China knocked the
S&P 500 off its record high.
The market had started the day off higher following another round of
stronger-than-expected reports on the U.S. economy, but it slumped suddenly in
the late morning. The S&P 500 was down as much as 1.3% at one point, Treasury
yields fell and the price of gold rose, before the moves moderated in the
By the close of trading, the S&P 500 index had trimmed its loss to 0.4%,
down 12.92 points to 3,373.23. The Dow Jones Industrial Average fell 128.05
points, or 0.4%, to 29,219.98, after earlier being down as many as 388 points.
The Nasdaq composite lost 66.21, or 0.7%, to 9,750.96.
Market watchers said they didn't see one clear trigger for the movements,
which were reminiscent of the market's sudden shifts during the height of the
U.S.-China trade war, when stocks would swing sharply following tweets from
President Donald Trump.
"You have this push and pull between good U.S. economic data and coronavirus
fears," said Brent Schutte, chief investment strategist at Northwestern Mutual
Wealth Management. "You're playing that back and forth, almost as you were
during the trade war, where people were reacting to changes minute by minute."
Stocks had been pushing higher for weeks, as investor belief hardened that
stimulus and other efforts by central banks and governments around the world
could limit the economic pain created by the virus. China's central bank on
Thursday cut its one-year prime rate to 4.05% from 4.15%.
But critics said stocks may have run too high, too fast given how uncertain
COVID-19's full impact on the global economy will be. South Korea's
fourth-largest city, far from the center of the viral outbreak in China, urged
residents to stay inside. The worry is that the number of new cases, which has
been falling, could re-accelerate.
"Until we get a more definitive sign that the top is in, you're going to
have volatility back and forth and trades off coronavirus headlines," Schutte
One measure of fear in the stock market, which shows how much traders are
paying to protect themselves from future swings in the S&P 500, was up nearly
20% at one point in midday trading before more than halving the gain.
The increased caution pushed up the price of gold, which touched its highest
price since early 2013. Investors also piled into the safety of U.S. government
bonds, which in turn weighed on their yields. The 10-year Treasury's yield sank
to 1.52% from 1.57% late Wednesday.
Besides the toll on human lives, investors worry about how much economic
damage the virus will cause. It's already led to sharp drop-offs in
manufacturing, travel and other economic activity in China, and the fear is how
long that will last and how far it will spread in the interconnected global
The world's largest shipping company, Denmark's A.P. Moller Maersk, said
Thursday it expects a weak start to the year due to the virus. Air France,
meanwhile, said that COVID-19 could mean a hit of up to 200 million euros, or
$220 million, for its operating results from February to April. Procter &
Gamble's chief financial officer told analysts that traffic at stores in China,
its second-largest market, is down considerably, though it held firm on its
forecast ranges for sales and profit this year.
The worries overshadowed another set of encouraging data on the U.S.
economy. A survey of manufacturers in the mid-Atlantic region jumped to its
highest level since February 2017, and a separate report showed leading
economic indicators in the United States rose more in January than economists
forecast. The number of workers applying for jobless claims rose a touch, but
it still remains low.
ViacomCBS slid 17.9% for the largest loss in the S&P 500 after it reported
weaker results for the latest quarter than analysts expected.
The biggest gainer, meanwhile, was E-Trade Financial, which jumped 21.8%
after Morgan Stanley said it would buy the online brokerage.
European markets were lower, with Germany's DAX losing 0.9% and France's CAC
40 down 0.8%. The FTSE 100 in London dipped 0.3%.
In South Korea, where authorities reported the country's first COVID-19
fatality, the Kospi sank 0.7%. Japan's Nikkei 225 rose 0.3%, the Hang Seng
dipped 0.2% and stocks in Shanghai jumped 1.8%.
Benchmark crude oil rose 49 cents to settle at $53.78 a barrel. Brent crude
oil, the international standard, rose 19 cents to $59.31 per barrel. Wholesale
gasoline rose 1 cent to $1.67 per gallon. Heating oil declined 1 cent to $1.70
per gallon. Natural gas fell 4 cents to $1.92 per 1,000 cubic feet.
Gold rose $9.10 to $1,616.60 per ounce, silver rose 2 cents to $18.31 per
ounce and copper fell 1 cent to $2.60 per pound.
The dollar rose to 112.06 Japanese yen from 111.58 yen on Wednesday. The
euro weakened to $1.0790 from $1.0796.