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Wall St bogged down by China virus fears, Intel limits losses

Sruthi Shankar/Bengaluru
Filed on January 24, 2020

(AP)

Wall Street came under pressure on Friday as investors sold energy, financial and healthcare stocks on mounting fears over the coronavirus outbreak in China, while strong gains for chipmaker Intel limited losses on the main indexes.

The US Centers for Disease Control and Prevention said a traveler from Wuhan, China had been diagnosed with the coronavirus in Chicago, Illinois, making it the second confirmed case of the virus in the country.

The virus outbreak in China has killed 26 people and infected more than 800 in the past week, raising concerns about its fallout on the global economy.

"If you look into these types of things in the past, they tend to create some sort of a panic initially," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

"But from the perspective of how they impact the economy and the US markets, they tend to be generally short-lived."

Chipmaker Intel Corp jumped 7.2 per cent to hit a 19-year high after it forecast better-than-expected 2020 earnings, joining many of its peers to signal a recovery in chip demand.

The Philadelphia SE Semiconductor index also hit a fresh record, with Broadcom Inc rising 2.9 per cent after entering a supply agreement with Apple Inc.

Earlier in the day, a slew of PMI data signaled some recovery in eurozone growth this year, while US data was mixed.

A report from IHS Markit showed that the index of domestic manufacturing activity inched up to 51.7 in January, falling short of economists' expectations, while a reading of the services sector activity was slightly better-than-expected.

Big banks including JPMorgan Chase & Co and Bank of America Corp were down about 1per cent, tracking a decline in US Treasury yields.

At 10:28 a.m. ET, the Dow Jones Industrial Average was flat at 29,160.36. The S&P 500 fell 0.18 per cent to 3,319.55 and the Nasdaq Composite was up just 0.03 per cent at 9,405.48.

Healthcare stocks dropped 0.9 per cent, led by a 4.3 per cent drop in Intuitive Surgical Inc after results.

Energy stocks fell 1.1per cent, hit by weaker oil prices on concerns that the China coronavirus may spread, curbing travel and oil demand.

Declining issues outnumbered advancers for a 1.24-to-1 ratio on the NYSE and a 1.33-to-1 ratio on the Nasdaq.

The S&P index recorded 78 new 52-week highs and two new lows, while the Nasdaq recorded 100 new highs and 26 new lows.

- Reuters


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