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US Stocks Tumble on Virus Fears        01/27 16:19

   U.S. stocks fell sharply Monday, sending the Dow Jones Industrial Average 
down by more than 450 points, as investors grappled with fresh worries about 
the spread of a new virus in China that threatens global economic growth.

   (AP) -- U.S. stocks fell sharply Monday, sending the Dow Jones Industrial 
Average down by more than 450 points, as investors grappled with fresh worries 
about the spread of a new virus in China that threatens global economic growth.

   The sell-off gave the Dow its first 5-day losing streak since early August 
and handed the S&P 500 its worst day since early October. Both indexes were off 
about 1.5%, giving up a significant portion of their gains this month.

   The latest bout of selling on Wall Street came after China announced a sharp 
rise in cases of the virus.

   Airlines, resorts and other companies that rely on travel and tourism 
suffered steep losses. Gold prices rose as did bonds as traders sought refuge 
in safer holdings. The yield on the 10-year Treasury fell to 1.60%, its lowest 
level since October. The market's broad slide followed a sell-off in markets in 
Europe and Japan.

   "Over the weekend you saw more cases," said Quincy Krosby, chief market 
strategist at Prudential Financial. "That got investors and traders worried 
that this may be a longer event. The next question is, 'What happens to global 
growth if this does continue and magnify?'"

   The Dow Jones Industrial Average fell 453.93 points, or 1.6%, to 28,535.80. 
The Dow had been down nearly 550 points. The S&P 500 index dropped 51.84 
points, or 1.6%, to 3,243.63. The Nasdaq lost 175.60 points, or 1.9%, to 
9,139.31. The Russell 2000 index of smaller company stocks gave up 18.09 
points, or 1.1%, to 1,644.14.

   Most markets in Asia were closed for the Lunar New Year holiday, but Japan's 
Nikkei fell 2.03%, its biggest decline in five months. European markets also 
slumped. Germany's DAX and France's CAC 40 dove 2.7%.

   Chinese health authorities have confirmed 2,750 cases of the virus along 
with 81 related deaths as authorities extended a week-long public holiday by an 
extra three days as a precaution against having the virus spread still further. 
The virus has spread to a dozen countries, including the U.S. Besides the 
threat to people's lives and health, investors are worried about how much 
damage the virus will do to profits for companies around the world.

   Even if they're thousands of miles away from Wuhan, the interconnected 
global economy means U.S. companies have plenty of customers and suppliers in 
China. It's the world's second-largest economy, and it accounts for 6% of all 
revenue for S&P 500 companies over the last 12 months. That's nearly double any 
other country besides the United States, according to FactSet.

   "Markets hate uncertainty, and the coronavirus is the ultimate uncertainty 
in that no one knows how badly it will impact the global economy," said Alec 
Young, managing director of global markets research at FTSE Russell.

   Resort operators were among the biggest losers in the S&P 500. Wynn Resorts 
led all company's in the index lower with an 8.1% tumble, while Las Vegas Sands 
dropped 6.7%. The companies get most of their revenue from the Chinese gambling 
haven of Macao. MGM Resorts fell 3.9%.

   American Airlines lost 5.5% and Delta dropped 3.4% as part of a broad slide 
for airlines because of concerns international travel will decline amid the 
virus' spread.

   Booking companies and cruise-line operators also got hurt. Expedia Group 
fell 2.7% and Carnival slid 4.7%.

   Chinese companies that trade shares in the U.S. also declined. Search engine 
operator Baidu fell 2.9% and e-commerce company JD.com dropped 4.8%.

   The technology sector, the biggest in the S&P 500, also saw heavy selling. 
Apple, which relies on China for supplies and sales, fell 2.9%.

   Financial stocks also took steep losses. Citigroup dropped 2.2%. 

   Energy stocks fell broadly as U.S. oil prices fell 1.9% on worries about 
reduced demand from China. Schlumberger skidded 5.1%.

   Utilities, real estate stocks and household goods makers held up better than 
the rest of the market, though they still finished in the red. The sectors are 
viewed as less-risky and are not as affected by international issues and 
developments.

   A few companies managed to climb against the sliding markets. Bleach and 
cleaning products maker Clorox rose 1.1%.

   Small biotechnology companies and drug developers made some of the biggest 
gains. Cleveland BioLabs more than doubled, while NanoViricides and BioCryst 
also climbed sharply.

   "If you look at this right now, investors and traders are looking at pockets 
of opportunity," Krosby said. "It's not a question of if, but when they start 
buying."

   Investors are also dealing with a heavy week of corporate earnings. Apple 
will report financial results on Tuesday. Pharmaceutical giant Pfizer and 
Starbucks will also report.

   Boeing, McDonald's, Coca-Cola and Amazon are also among some of the biggest 
names reporting earnings throughout the week that includes 147 S&P 500 
companies.

   Benchmark crude oil fell $1.05 to settle at $53.14 a barrel. Brent crude 
oil, the international standard, dropped $1.37 to close at $59.32 a barrel.

   Wholesale gasoline slid 3 cents to $1.48 per gallon. Heating oil declined 5 
cents to $1.70 per gallon. Natural gas inched 1 cent higher to $1.90 per 1,000 
cubic feet.

   Gold rose $5.50 to $1,577.40 per ounce, silver fell 6 cents to $18.06 per 
ounce and copper slid 9 cents to $2.60 per pound.

   The dollar fell to 108.92 Japanese yen from 109.24 yen on Friday. The euro 
weakened to $1.1020 from $1.1029. 


(CZ)

 
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