Dow drops 227 points and Wall Street finishes down for the week amid spike in new coronavirus cases in China
- All three major US stock indexes were down for the week at Friday’s close
- Spike in new coronavirus cases in China raised fears epidemic will continue
- New service sector data showed U.S. business activity stalled in February
U.S. stock indexes fell on Friday, ending the week in the negative, after a spike in new coronavirus cases in China and elsewhere sent investors scrambling for safer assets such as gold and government bonds.
The Dow Jones Industrial Average fell 227.3 points, or 0.78 percent, to 28,992.68, the S&P 500 lost 35.55 points, or 1.05 percent, to 3,337.68 and the Nasdaq Composite dropped 174.38 points, or 1.79 percent, to 9,576.59.
Traders remain anxious over the economic fallout from the virus outbreak that began in China, which continues to spread.
China reported a jump in new cases on Friday, while South Korea became the latest hot spot with 100 new cases and more than 80 people tested positive for the virus in Japan.
A trader works on the floor of the New York Stock Exchange at the end of of the day ion Friday. The Dow lost over 200 points, reportedly on worries about coronavirus
A five-day view of the Dow Jones Industrial average shows the index down for the week
Travel restrictions, business closures and other efforts in China aimed at containing the spread of the virus have begun to disrupt supply chains and sales prospects for Apple and other big companies.
The situation has begun to weigh on the U.S. economy. Data from IHS Markit show U.S. manufacturing and business activity slowed in February from the previous month, coming in below analysts’ expectations.
‘With the stock market overvalued and extended, especially with tech stocks being overweight, when you get these negative data points, it is an excuse to take some profits,’ said Mike Gibbs, director of portfolio and technical strategy at Raymond James.
Declines on Friday were led by heavyweights Microsoft Corp , Amazon.com Inc and Apple Inc for a second straight day.
‘I think Apple’s announcement last week is the beginning of the hard news flow,’ said Hugh Anderson, managing director at HighTower Advisors in Las Vegas, Nevada, referring to the iPhone maker’s sales warning due to the impact of the virus outbreak.
Numbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange on Friday
‘Not only are you seeing a break in the supply chain but also you’re seeing a break in the demand for products, which is a fundamental challenge to an already moderate global growth.’
Wall Street’s fear gauge, the CBOE volatility index, hit its highest level in nearly three weeks.
The risk-off sentiment drove up gold and bond prices, while falling Treasury yields hit shares of lenders, with the S&P banks index down 1.2 percent.
A slide in oil prices knocked 1.1 percent off the S&P energy index.