Wall Street struggles to add fresh gains as the coronavirus cases jump

February 14, 2020 - 2 weeks ago
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Wall Street bulls struggled to take the lead on Thursday as the Trump administration changed its tune on China’s handling of the coronavirus epidemic.

Top economic official Larry Kudlow stated the U.S. is “disappointed” with how events were playing out.

All three of the major U.S. stock market indices slid into a decline ahead of the closing bell, as investors grappled with a jump in reported coronavirus cases and the virus’ possible economic impact.

The Dow Jones Industrial Average slid by -128.11 points, or -0.43%, to 29,423.31.

The S&P 500 fell -5.51 points or -0.16% to 3,373.94 after notching an intraday record earlier in the session.

The Nasdaq Composite closed +13.99 points or +0.14% lower at 9,711.97. The tech-heavy index also hit an all-time intraday high before dropping into the close.

Microsoft shares slipped -0.54%, while Cisco Systems, however, was the Dow’s biggest decliner, falling -5.23% after the company reported another decline in overall revenue. In the fourth quarter, Cisco’s revenue dropped by -4% on a year-over-year basis. That decline overshadowed a better-than-expected profit.

The industrials sector dropped -0.7% and were the biggest laggard in the S&P 500. Health care also pulled back -0.5%.

United and American Airlines both fell more than -1%. Wynn Resorts and Las Vegas Sands — two proxy stocks for the coronavirus given their exposure to China — declined by more than -2% each.

China said it confirmed 15,152 new cases and 254 additional deaths.

That brings the country’s total death toll to 1,367 as the number of people infected jumped close to 60,000, according to the Chinese government.

The jump in cases was due to the way Chinese authorities are counting them. Health authorities in Hubei province said Thursday that they changed the way they tabulate case totals — “clinically diagnosed” cases now count toward the “confirmed case” count, resulting in the sudden surge among the latter.

During the SARS outbreak of the early 2000s, the S&P 500 lost nearly -13%. It also dropped nearly -6% during the Ebola outbreak in 2014.

Thus far, the S&P 500 is up since the coronavirus outbreak. To be sure, some of those crises coincided with other events that also contributed to the broad index’s decline.

On the data front, weekly jobless claims rose marginally but remained near multi-decade lows.

The latest read on the U.S. Consumer Price Index — a widely followed measure of inflation — rose 2.5% on a year-over-year basis.

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