Wall Street fell in a broad sell-off on Friday, as investors fled equities on growing concerns over the scope of the coronavirus outbreak, capping the S&P 500's worst week in six months.
All three major US stock averages turned sharply negative, with the S&P 500 seeing its biggest one-day percentage drop in over three months after the Centers for Disease Control and Prevention confirmed the second case of the virus on US soil, this time in Chicago.
S&P 500 and Dow wrapped up their worst week since August and the Nasdaq snapped a six-week winning streak.
Market participants kept a wary eye on developments surrounding the coronavirus, which the World Health Organization (WHO) deemed "an emergency in China," having now killed 26 people and infected more than 800 on the eve of the Lunar New Year holiday. "Markets hate uncertainty and the virus has been enough to inject uncertainty in the markets," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
But some analysts believe the investors were looking for a reason to take money off the table. "The virus is really more an excuse to take profits right now," said Sam Stovall, chief investment strategist of CFRA Research in New York.
Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, agreed. "The markets are expensive and were looking for a reason to go down, and (the virus) is the excuse to do it." Intel Corp's stock surged 8.1% after reporting jumps in data center and cloud computing revenue and forecasting better-than-expected 2020 earnings.
Consumer credit company American Express Co benefited from a robust US retail sales environment, posting a better-than-expected 9% annual revenue increase. Its stock advanced 2.8%. Fourth-quarter reporting season is well under way, with 74 companies in the S&P 500 having reported, 68.2% of which have beaten Wall Street estimates, according to Refinitiv data.
Analysts now expect earnings to have contracted by 0.5%, on aggregate, in the October to December quarter. Next week, a swarm of closely watched results are expected, notably from Apple Inc, McDonald's Corp, Starbucks Corp, Tesla Inc, Amazon.com Inc, Boeing Co, Facebook Inc and Caterpillar Inc, among others.
The Dow Jones Industrial Average fell 170.36 points, or 0.58%, to 28,989.73, the S&P 500 lost 30.09 points, or 0.90%, to 3,295.45 and the Nasdaq Composite dropped 87.57 points, or 0.93%, to 9,314.91. Of the 11 major sectors in the S&P 500, all but utilities ended the session in the red, with healthcare and financial suffering the largest percentage losses.
Broadcom Inc rose 1.3% after entering an agreement with Apple Inc for the supply of wireless components used in its products. Rivals Skyworks Solutions and Qorvo Inc were down 4.6% and 4.5%, respectively, on the news.
Declining issues outnumbered advancing ones on the NYSE by a 2.33-to-1 ratio; on Nasdaq, a 2.94-to-1 ratio favored decliners. The S&P 500 posted 85 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 115 new highs and 62 new lows. Volume on US exchanges was 7.96 billion shares, compared with the 7.13 billion average over the last 20 trading days.
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