Wall Street stocks slide again after coronavirus fears sent Dow plunging 1,000 points in biggest one-day drop in two years
- Stocks opened higher on Tuesday morning, but then slid in morning trading
- Dow lost 1,000 points on Monday nearly erasing its gains for the year
- Fears of coronavirus becoming a global pandemic drove the mass sell-off
U.S. stocks are slipping in early trading Tuesday, a day after the market’s biggest drop in two years on worries over the worldwide spread of coronavirus.
As of 10.30am, the Dow Jones Industrial Average fell 104 points, or 0.4 percent, to 27,859. The S&P 500 index fell 0.7 percent. The Nasdaq fell 0.4 percent.
The CBOE volatility index, an options-based gauge of investor anxiety, was up another 4.5 percent after hitting its highest level since January 2019 on Monday.
Technology companies rose, reversing course from a day earlier. Intuit climbed after following its plan to buy Credit Karma. Facebook led communications stocks higher.
U.S. stock index futures edged higher on Tuesday, a day after the Dow Jones Industrial Average logged their worst session in two years. Traders are seen above on the NYSE Monday
Even positive earnings news was not enough to buoy the main indexes, however. Shares of Dow-member Home Depot Inc rose 2.5 percent in pre-market trading after the home improvement chain beat quarterly sales and profit estimates.
Another upbeat report in the retail space was from department store operator Macy’s Inc, which jumped more than 5 percent after a smaller-than-expected drop in quarterly same-store sales.
HP Inc gained 4 percent after the company said it would step up efforts to slash costs and buy back stock, as it seeks investor support to defend against a $35 billion takeover offer from U.S. printer maker Xerox Holdings Corp.
The positive fourth-quarter earnings along with hopes of a limited damage from the outbreak had fueled Wall Street’s run to record highs until last week.
U.S. stock indexes have declined in the past three sessions with fears of a pandemic knocking off more than 3 percent on Monday after a flare up in infections in several countries.
As of Monday’s close, the S&P 500 and the Dow had nearly erased their gains for the year.
A five-day view of the Dow Jones Industrial Average shows Monday’s steep decline
With cases of the virus outside China rising, traders are fretting about the global implications of the outbreak.
‘What was largely a Chinese issue to resolve has soon become an international problem, with European eyes transfixed on Italian efforts to curb the spread of the virus,’ said Joshua Mahony, senior market analyst at IG.
‘Fears over a potential coronavirus contagion throughout Europe is likely to provide substantial risk-off sentiment for days and weeks to come, with significant pressure on the Italians to stop this outbreak from spreading throughout the continent.’
Despite the modest rebound that futures indicated on Tuesday, not all investors were convinced that the sell-off had ended.
‘Wall Street is still on course for a slightly positive open but given how quickly Europe has turned south, I’m not confident it will last,” said Craig Erlam, senior market analyst at OANDA Europe.
‘Perhaps investors in the US still feel a little sheltered from the direct effects of the spread at the moment but should it accelerate in Europe and Asia, I don’t think they will for long.’