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Stocks sell off to end the week on coronavirus angst
31-Jan-20 16:20 ET
Dow -603.41 at 28255.94, Nasdaq -148.00 at 9150.95, S&P -58.14 at 3225.52

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

[BRIEFING.COM] The stock market sold off to end the week, and month, on growing concerns about the coronavirus and the negative effect it could have on economic growth. The Dow Jones Industrial Average (-2.1%) and Russell 2000 (-2.1%) led the retreat, followed by the S&P 500 (-1.8%) and Nasdaq Composite (-1.6%).

Ten of the 11 S&P 500 sectors finished lower, including six that lost at least 2.0%. The energy sector (-3.2%) bore the brunt of the damage amid the continued weakness in oil prices ($51.58/bbl, -0.60, -1.2%) and the earnings disappointments in Exxon Mobil (XOM 62.12, -2.67, -4.1%) and Chevron (CVX 107.14, -4.26, -3.8%).

The 7% gain in shares of Amazon (AMZN 2008.72, +138.04, +7.4%) following its blowout quarterly results masked the widespread selling in the consumer discretionary sector (+0.8%). IBM (IBM 143.73, +6.96, +5.1%) also bucked the broader trend after it announced a CEO leadership change.

The coronavirus angst was exacerbated by increasing reports of worldwide cases; Delta Air Lines (DAL 55.74, -1.36, -2.4%), United Airlines (UAL 74.80, -2.95, -3.8%), and American Airlines (AAL 26.84, -0.88, -3.2%) suspending U.S.-China flights; and the White House declaring a public health emergency in addition to announcing some travel restrictions.

Fueling de-risking efforts were the disappointing earnings results and/or guidance from Caterpillar (CAT 131.35, -4.02, -3.0%) and Visa (V 198.87, -9.24, -4.4%). Economic data wasn't too great, either. Preliminary GDP data for the eurozone continued to depict a sluggish economy, and the Chicago PMI fell to its lowest level since December 2015 (42.9).

Interestingly, the orderly retreat in the market didn't reflect the panic selling normally attributed with a sharp decline like today. Instead, it reflected an aversion to jump into the market that had gotten a bit overextended and had the potential to fall deeper on more coronavirus headlines.

Unsurprisingly, U.S. Treasuries remained on the advance amid the perceived growth concerns that rattled equities. The 2-yr yield fell seven basis points to 1.32%, and the 10-yr yield fell four basis points to 1.52%. The U.S. Dollar Index fell 0.5% to 97.38.

Reviewing Friday's batch of economic data:

Personal income was up 0.2% m/m in December (Briefing.com consensus +0.3%) while personal spending was up 0.3%, as expected. The PCE Price Index was up 0.3% (Briefing.com consensus +0.2%). That left the yr/yr change at 1.6% versus 1.4% in November. The core PCE Price Index was up 0.2%, as expected. That left the yr/yr change at 1.6% versus 1.5% in November.
he key takeaway from the report is that inflation is still running comfortably below the Fed's longer-run inflation target of 2.0%, making it clear that the market need not fear a rate hike anytime soon.
The Q4 Employment Cost Index increased 0.7%, as expected, seasonally adjusted, for the three-month period ending in December 2019 after increasing 0.7% for the three-month period ending in September 2019.
The key takeaway from the report is that it shows a continuation of moderate growth in compensation costs.
The final reading for the January University of Michigan Index of Consumer Sentiment showed an upward revision to 99.8 (Briefing.com consensus 99.1) from the preliminary reading of 99.1. The final reading for December was 99.3.
The key takeaway from the report is that consumer attitudes remained resilient despite a spate of disconcerting items, such as the geopolitical conflict with Iran, the impeachment trial, and the onset of the coronavirus, underscoring that attitudes about employment and income potential are integral to consumer sentiment.
The Chicago PMI for January fell to 42.9 (Briefing.com consensus 48.7) from a downwardly revised 48.2 reading in January (from 48.9). This was its lowest level since December 2015.

Looking ahead, investors will receive the ISM Manufacturing Index for January, the Construction Spending report for December, and auto and truck sales for January on Monday.

Nasdaq Composite +2.0% YTD
S&P 500 -0.2% YTD
Dow Jones Industrial Average -1.0% YTD
Russell 2000 -3.3% YTD

Market Snapshot
Dow 28255.94 -603.41 (-2.09%)
Nasdaq 9150.95 -148.00 (-1.59%)
SP 500 3225.52 -58.14 (-1.77%)
10-yr Note +30/32 1.501
NYSE Adv 613 Dec 2254 Vol 1.3 bln
Nasdaq Adv 749 Dec 2446 Vol 2.7 bln

Industry Watch
Strong: Consumer Discretionary
Weak: Energy, Industrials, Information Technology

Moving the Market

-- Stock market sells off on pestering growth concerns attributed to coronavirus

-- Amazon (AMZN) rose 7% after reporting blowout quarterly results

-- Heavy selling in the energy sector amid weaker oil prices and earnings disappointments

-- Disappointing Chicago PMI for January, soft GDP data out of the eurozone

WTI crude closes down 1%
31-Jan-20 15:25 ET
Dow -607.26 at 28252.09, Nasdaq -142.26 at 9156.69, S&P -58.69 at 3224.97

[BRIEFING.COM] The S&P 500 is back down at session lows with a 1.8% decline. The Russell 2000 is down 1.8%.

One last look at the S&P 500 sectors shows the energy (-3.4%), information technology (-2.6%), industrials (-2.4%), and materials (-2.2%) sectors down with heavy losses. The consumer discretionary sector (+1.0%) remains the lone sector in the green solely because of Amazon (AMZN 2014.50, +143.68, +7.7%).

WTI crude settled down $0.60 (-1.2%) to $51.58/bbl. For the month, crude futures sold off more than 15%.