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U.S. Stocks Unsteady After Coronavirus Rout Stocks Fall Again as Coronavirus Spreads
(about 4 hours later)
Stocks on Wall Street were unsteady on Wednesday, dropping slightly after rebounding from back-to-back losses this week that had wiped more than 6 percent off the S&P 500. Nervousness about the spreading coronavirus gripped Wall Street again on Wednesday, and an early rise in stock prices gave way to a third day of selling this week.
Investors have been contending with the potential for the coronavirus outbreak to disrupt global trade and slow growth, and stock prices around the globe have reflected concerns about the virus’s spread outside of China. The S&P 500 was down 0.4 percent at the end of trading, bringing its losses for the week to more than 6 percent. Bonds rallied, pushing the yield on the 10-year Treasury note to a record low for a second day, and the price of oil also fell.
Wednesday’s volatility came after a sell-off in the United States that saw stocks fall 3 percent on Tuesday and suffer their worst one-day slide in two years the day before. Major markets in Europe were also higher after days of selling, though stocks in Asia mostly drifted lower on Wednesday. Investors have been contending with the potential for the coronavirus outbreak to disrupt global trade and slow growth, and stock prices around the world have reflected concerns about the virus’s spread outside China. More than 80,000 people have been infected by the virus, which has killed more than 2,700.
The virus outbreak that began in China has now infected more than 80,000 people and killed more than 2,700 around the world. Authorities in Italy are struggling to contain an outbreak that is threatening to disrupt Europe’s fourth-largest economy. Greece and Brazil reported their first cases. Iran has seen dozens of deaths from the virus, with cases spreading across its borders throughout the Middle East. South Korea is working to manage the largest outbreak outside of China, with more than 1,200 reported cases. Wednesday began with the S&P 500 rising more than 1.5 percent before giving up those gains. Market observers attributed the change in sentiment to comments from Germany’s health minister that the country was at the beginning of a coronavirus epidemic.
As the virus spreads, economists warn the crisis could roil global supply chains and hamper economic growth. Concerned investors dumped stocks, seeking safer investments like government bonds, pushing prices up and yields down. Later in the day, officials reported that 83 people in Nassau County, N.Y., just outside New York City, were in voluntary isolation for potential coronavirus exposure.
Updated Feb. 26, 2020Updated Feb. 26, 2020
President Trump on Wednesday placed the blame for the turbulent markets on the media outlets CNN and MSNBC, which he said in a tweet were “doing everything possible” to make the virus outbreak look “as bad as possible, including panicking markets, if possible.” He added that the United States was “in great shape” and that he would hold a news conference on the coronavirus situation on Wednesday evening. Elsewhere, the authorities in Italy are struggling to contain an outbreak that is threatening to disrupt Europe’s fourth-largest economy. Greece and Brazil reported their first cases. Dozens in Iran have died from the virus, with cases spreading across the country’s borders throughout the Middle East. South Korea is working to manage the largest outbreak outside China, with more than 1,200 reported cases.
As the virus spreads, economists warn the crisis could roil global supply chains and hamper economic growth. Concerned investors are dumping stocks, seeking safer investments like government bonds, pushing prices up and yields down.
Tech stocks, which were among the worst hit by sell-offs this week as investors worried about impacts on supply chains, recovered losses. On Wednesday, Microsoft shares gained nearly 1 percent and Apple shares were up more than 1.3 percent. Netflix gained more than 4 percent. The focus of this selling has increasingly been stocks in the United States and Europe, where investors had — for weeks — shrugged off the outbreak while it was mostly contained to China. But as the number of cases in China appears to have peaked, outbreaks outside the country are on the rise.
Oil prices edged lower. West Texas intermediate, the American benchmark, dipped under $50 a barrel. Brent crude, the international benchmark, was under $55 a barrel at 12 p.m. That has created a “divergence” between so-called developed markets like the United States and emerging markets, like China, that were initially hard hit, said Mark Haefele, the chief investment officer of UBS Global Wealth Management, in a research note to clients.
The yield on the 10-year Treasury note fell even further on Wednesday after closing at a record low of 1.335 percent on Tuesday, a sign that investors expect growth in the United States to slow. “We believe the divergence we are now seeing between developed- and emerging-market equity performance is indicative of China’s relative success in containing the outbreak, and of the increased uncertainty facing developed markets,” Mr. Haefele wrote. “We expect this divergence to continue.”
European markets, which fell more than 1 percent earlier on Wednesday, recovered through the day. President Trump on Wednesday sought to place the blame for the market turbulence on the media outlets CNN and MSNBC, which he said on Twitter were “doing everything possible” to make the virus outbreak look “as bad as possible, including panicking markets, if possible.” He added that the United States was “in great shape.”
The DAX in Germany was flat while the FTSE 100 in Britain was slightly higher. In Asia, the Hang Seng in Hong Kong lost 0.7 percent and the Shanghai Composite Index dropped by 0.8 percent. Energy companies led the selling Wednesday as oil prices declined, while cruise operators including Royal Caribbean and Carnival continued to fall sharply. Both stocks have lost more than 30 percent over the past month.
The Associated Press and Reuters contributed reporting. Companies that rely on consumer spending and industrial stocks also fell. Those losses outweighed gains in technology and health care stocks.
After the close of trading on Wednesday, Microsoft warned investors that it would not be able to meet its sales forecasts for its personal computing business, because “the supply chain is returning to normal operations at a slower pace than anticipated.”
Microsoft’s shares, which rose during regular trading on Wednesday, fell in after-hours trading.
In the oil market, West Texas intermediate, the American benchmark, dipped below $50 a barrel during trading on Wednesday. Brent crude, the international benchmark, was under $55 a barrel.
The Associated Press contributed reporting.