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Stock market sells off more than 3% on widening spread of coronavirus
24-Feb-20 16:20 ET

Dow -1031.60 at 27960.72, Nasdaq -355.31 at 9221.32, S&P -111.86 at 3225.89

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

[BRIEFING.COM] The stock market sold off more than 3% on Monday following a surge in coronavirus cases outside China, including South Korea, Italy, and Iran. The Dow Jones Industrial Average (-3.6%), S&P 500 (-3.4%), and Russell 2000 (-3.0%) each turned negative for the year, while the Nasdaq Composite (-3.7%) gave up most of its monthly gains.

Governments took swift action to help contain the outbreak, such as closing public spaces, but weakness in foreign equity markets reflected concerns about the possibility of a global pandemic. South Korea's Kospi fell 3.9%, and Italy's MIB fell 5.4%. China's Shanghai Composite declined just 0.3% amid reports that the rate of new coronavirus cases may have peaked in the region.

The World Health Organization (WHO) said that the drop in infections in China is "real" due to Beijing's aggressive approach. It remained unclear, however, if the virus would continue to worsen in a way that further impedes economic activity that consequently hurts earnings prospects.

In turn, de-risking efforts were widespread with all 11 S&P 500 sectors finishing in negative territory, including seven that dropped at least 3.0%. The energy (-4.7%), information technology (-4.2%), and consumer discretionary (-3.5%) sectors led the retreat, while the utilities sector (-1.2%) declined the least.

Technology and travel stocks, such as Advanced Micro Devices (AMD 49.12, -4.16, -7.8%) and American Airlines (AAL 25.45, -2.37, -8.5%), sold off on concerns that their businesses would be hurt by the coronavirus. Many health care names like UnitedHealth (UNH 277.79, -23.64, -7.8%) were additionally pressured by Senator Bernie Sanders (I-VT) decisively winning the Nevada caucuses.

Away from equities, investors continued to seek safety in gold ($1676.70/ozt, +27.80, +1.7%) and U.S. Treasuries given the growth concerns and weakness in stocks. Hedging interest against further downside was also on full display by the 46.6% surge in the CBOE Volatility Index (25.03, +7.95).

The 2-yr yield and the 10-yr yield fell nine basis points each to 1.26% and 1.38%, respectively. The U.S. Dollar Index finished flat at 99.30. WTI crude dropped 3.9%, or $2.09, to $51.25/bbl.

Separately, Newmont Goldcorp (NEM 50.26, +0.82, +1.7%) and Gilead Sciences (GILD 72.90, +3.20, +4.6%) exhibited relative strength throughout the day. Newmont set a 52-week high amid the continued strength in gold prices, while Gilead benefited from an acknowledgement from WHO that its Remdesivir drug is the only drug that appears to be effective in treating the coronavirus.

Investors did not receive any economic data on Monday. Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for February, the FHFA Housing Price Index for February, and the S&P Case-Shiller Home Price Index for December on Tuesday.

Nasdaq Composite +2.8% YTD
S&P 500 -0.2% YTD
Dow Jones Industrial Average -2.0% YTD
Russell 2000 -2.4% YTD


Market Snapshot
Dow 27960.72 -1031.60 (-3.56%)
Nasdaq 9221.32 -355.31 (-3.71%)
SP 500 3225.89 -111.86 (-3.35%)
10-yr Note +32/32 1.367

NYSE Adv 290 Dec 2607 Vol 1.2 bln
Nasdaq Adv 459 Dec 2781 Vol 3.1 bln


Industry Watch
Strong: Utilities

Weak: Energy, Information Technology, Consumer Discretionary


Moving the Market
-- Stock market drops more than 3% as coronavirus cases surge outside China, including South Korea, Italy, and Iran

-- Weakness in technology and travel stocks

-- Treasuries and gold rally in flight to safety; 10-yr yield nears all-time low from 2016



WTI crude erases monthly gain
24-Feb-20 15:25 ET

Dow -823.75 at 28168.57, Nasdaq -291.06 at 9285.57, S&P -90.11 at 3247.64
[BRIEFING.COM] The S&P 500 is currently down 2.8%, reducing its yearly gain to 0.5%.

One last look at the S&P 500 sectors shows all 11 groups trading with losses. The energy sector (-4.0%) continues to lead the retreat with a huge loss, while the utilities sector (-0.6%) is down modestly given its defensive-oriented, and rate-sensitive, bias.

WTI crude fell 3.9% (-$2.09) to $51.25/bbl to give up its monthly gain.