forex

Stocks - S&P Suffers Worst Day Since October on Wuhun Virus Fears

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By Yasin Ebrahim

 

 

Investing.com – The S&P capped the first month of the new decade with its biggest daily loss since October as coronavirus-led selling intensified on concerns a pandemic could send the global economy into turmoil.

 

 

The S&P 500 fell 1.77%, while the Nasdaq Composite slumped 1.59% and the Dow Jones Industrial Average lost 2.09%.

Thr S&P and Dow ended January in the red.

 

Fears of contagion gripped stocks amid growing doubt about whether China can contain the outbreak, with more than 10,000 cases reported globally so far, and the death toll rising to 213.

 

The White House on Friday declared the coronavirus a public health emergency in the United States and warned that people who pose a risk of transmitting the disease will temporarily be suspended from entry into the U.S.

 

The rapid spread of the virus has triggered recession fears as the impact on China's already slowing economy could spill over into the global economy.

 

But some have said it is far too early to estimate the impact on global growth and suggested the recent selloff was a long time coming as stocks were overbought.

 

 

"Global growth right now is projected to be greater than 3%. If this continues, and maybe even if it only continues for another month, you could knock that down below 3(%)," Blackstones' Byron Wien told CNBC.

 

"I think the market was overbought. It was due for a correction. A correction is healthy,” Wein added.

 

The selling on stocks was exacerbated by a slump in energy, paced by weakness in Exxon Mobil (NYSE:XOM).

 

 

Exxon fell about 4% after the oil major missed quarterly estimates, which it blamed on short-term supply issues in its refining business.

 

 

Industrials also played a role in the broader selloff, paced by declines in Caterpillar (NYSE:CAT) and Honeywell (NYSE:HON) on weak quarterly results and guidance.

 

 

Caterpillar fell 3% after reporting mixed quarterly results and offering up a weaker-than-expected outlook on full-year performance, warning that global economic uncertainty would continue to weigh on performance.

 

Honeywell slipped about 3% as its quarterly revenue missed Wall Street estimates, with the industrial pinning the blame on impact from the grounding of Boeing's 737 Max.

Consumer discretionary proved an exception to the rout on Wall Street thanks to a pop in shares of Amazon (NASDAQ:AMZN) after the e-commerce giant smashed earnings expectations. Shares rose 7%, but were off earlier highs.

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