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Stock market loses more than 1.5% as coronavirus outbreak worsens
27-Jan-20 16:20 ET
Dow -453.93 at 28535.71, Nasdaq -175.60 at 9139.33, S&P -51.84 at 3243.63

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The large-cap indices retreated more than 1.5% on Monday, as the continued outbreak of the coronavirus triggered more profit taking and some overdue selling. The S&P 500 lost 1.6%, the Dow Jones Industrial Average lost 1.6%, and the Nasdaq Composite lost 1.9%. The Russell 2000 declined 1.1%.

Most of today's decline transpired at the open after the coronavirus death toll increased to more than 80 in China with five confirmed cases of the virus in the U.S. The CDC said the health risk to the U.S. remains low, but the fact that the outbreak worsened over the weekend fostered a risk-off sentiment throughout the session.

There was no follow-through selling, but all 11 S&P 500 sectors did finish in negative territory. The energy (-2.8%) and information technology (-2.4%) sectors were hit the hardest, while the defensive-oriented consumer staples (-0.3%) and utilities (-0.3%) sectors posted modest losses. Energy stocks were undercut by another 2.2% drop in WTI crude ($53.01/bbl, -1.20).

The underlying view was that earnings growth, particularly for companies with Chinese exposure, may not be as strong as had hoped due to the coronavirus reducing economic activity. In turn, Apple (AAPL 308.95, -9.36, -2.9%), Wynn Resorts (WYNN 123.89, -10.86, -8.1%), and those within the Philadelphia Semiconductor Index (-3.9%) took huge losses today.

Investors might appreciate the fact that the market's positive trend remained intact, though, as the S&P 500 closed well above its ascending 50-day moving average (3199). D.R. Horton (DHI 59.67, +1.16, +2.0%) shareholders, meanwhile, were pleased to hear that the company beat top and bottom-line estimates and raised its FY20 guidance.

Still, a view that the selling may not be over contributed to a 25.2% spike in the CBOE Volatility Index (18.23, +3.67), as investors scrambled for protection, while others rushed for safety in U.S. Treasuries. The 2-yr yield fell five basis points to 1.43%, and the 10-yr yield fell eight basis points to 1.61%. The U.S. Dollar Index increased 0.1% to 97.94.

Monday's lone economic report was the New Home Sales report for December, which failed to stir much enthusiasm in the market:

New home sales decreased 0.4% m/m in December to a seasonally adjusted annual rate of 694,000 units (Briefing.com consensus 725,000) from a downwardly revised 697,000 (from 719,000) in November.
The key takeaway from the report is that new home sales were still strong on a year-over-year basis (+23.0%), benefiting from the drop in mortgage rates and the extremely tight supply of existing homes for sale.

Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for January, the Durable Goods Orders report for December, and the S&P Case-Shiller Home Price Index for November on Tuesday.

Nasdaq Composite +1.9% YTD
S&P 500 +0.4% YTD
Dow Jones Industrial Average unch YTD
Russell 2000 -1.5% YTD

Market Snapshot
Dow 28535.71 -453.93 (-1.57%)
Nasdaq 9139.33 -175.60 (-1.89%)
SP 500 3243.63 -51.84 (-1.57%)
10-yr Note +30/32 1.602
NYSE Adv 623 Dec 2255 Vol 977.6 mln
Nasdaq Adv 757 Dec 2436 Vol 2.6 bln

Industry Watch
Strong: Utilities, Consumer Staples
Weak: Information Technology, Energy, Materials

Moving the Market

-- Stocks drop in broad-based retreat as coronavirus outbreak worsens

-- Triggers profit taking, overdue selling

-- Yields drop, oil prices drop

WTI crude drops more than 2%
27-Jan-20 15:25 ET
Dow -377.26 at 28612.38, Nasdaq -150.92 at 9164.01, S&P -42.94 at 3252.53

[BRIEFING.COM] The S&P 500 is currently down 1.3%.

One last look at the S&P 500 sectors shows energy (-2.7%) and information technology (-2.1%) down more than 2%, while the defensive-oriented consumer staples (unch) and utilities (unch) sectors are trading at their flat lines.

WTI crude fell $1.20 (-2.2%) to $53.01/bbl, as expectations for oil demand remained weak amid the Wuhan coronavirus outbreak.