Stocks fell on Thursday as the death toll from the coronavirus continues to rise in China, stoking fears about the virus’ impact on global economic growth.
The Dow Jones Industrial Average traded 44 points lower, or 0.2% after falling more than 100 points at the open. The S&P 500 slid 0.3% while the Nasdaq Composite declined by 0.1%.
China’s National Health Commission confirmed Thursday that the death toll has hit 170, with confirmed cases of the virus surpassing 7,700. Cases have also been confirmed in places outside of China, including the U.S.
“The spread of the Wuhan virus isn’t accelerating, but markets becoming more concerned about future earnings and economic growth as companies implement work stoppages to reduce the chance of the disease spreading,” said Tom Essaye, founder of The Sevens Report.
Airline stocks such as American, Delta and United all fell more than 0.5%. Casino stocks Las Vegas Sands and Wynn Resorts dropped 0.5% and 1%, respectively. Expedia and Carnival shares were down by 1.7% and 5.4%, respectively.
A woman purchases surgical masks at a store in a shopping mall on January 29, 2020 in Hong Kong, China.
Anthony Kwan | Getty Images
Caterpillar, a bellwether for global the global economy, was down 0.4% while the VanEck Vectors Semiconductor ETF (SMH) slid 0.6%.
Wall Street was also under pressure after Facebook reported quarterly results that showed a sharp rise in expenses and narrowing margins. Facebook shares fell more than 7%.
Tesla enjoyed a second consecutive quarterly profit on record vehicle deliveries and vowed to produce over 500,000 units this year, sending the stock surging by 8.3%. Microsoft beat Wall Street expectations on fourth-quarter sales and profit on the back of strong cloud revenue.
About 200 S&P 500 companies have reported quarterly earnings thus far, with 70% of them posting better-than-expected profits, FactSet data shows.
In-line data on the U.S. economy failed to quell the lingering fears around the virus and the mixed quarterly results. U.S. GDP grew by 2.1% in the fourth quarter, matching a Dow Jones estimate. However, the U.S. economy grew at its slowest annual rate in three years in 2019.
“For the moment, I think negative risks are more likely than positive ones,” said Eric Winograd, senior economist at AllianceBernstein. “But with the economy as stable as it is, it would take a very large shock indeed to materially alter the economy’s basic trajectory.”
—CNBC’s Elliot Smith contributed to this report.
