Dow drops 227 points and Wall Street ends for the week amid peak in new coronavirus cases in China
- All three of the major US stock indices fell this week at the close of Friday
- Spike in new cases of coronavirus in China increased anxiety epidemic will continue
- New service sector data showed that US business came to a halt in February
US stock indexes fell on Friday and ended the week negatively, after peaking in new coronavirus cases in China and elsewhere, sending investors in search of safer assets such as gold and government bonds.
The Dow Jones Industrial Average dropped 227.3 points, or 0.78 percent, to 28,992.68, the S&P 500 lost 35.55 points or 1.05 percent to 3,337.68, and the Nasdaq Composite dropped 174.38 points, or 1.79 percent, to 9,576.59.
Traders remain concerned about the economic impact of the virus outbreak that began in China, which continues to spread.
China reported a jump in new cases on Friday, while South Korea became the newest hotspot with 100 new cases and more than 80 people tested positive for the virus in Japan.
A trader works on the floor of the New York Stock Exchange at the end of the day on Friday. The Dow lost more than 200 points, reportedly worried about the corona virus
A five-day display of the Dow Jones Industrial average shows the index for the week down
Travel restrictions, company closures and other efforts to prevent the virus from spreading have begun to disrupt supply chains and sales opportunities for Apple and other large companies.
The situation is starting to weigh on the US economy. Data from IHS Markit show that US manufacturing and business activity slowed down in February compared to the previous month, which means that analysts’ expectations are lower.
“Because the stock market is overvalued and expanded, especially because tech stocks are too heavy, it is an excuse to make some profit if you get these negative data points,” said Mike Gibbs, portfolio and technical strategy director at Raymond James.
Declines on Friday were led by heavyweights Microsoft Corp, Amazon.com Inc. and Apple Inc. for a second consecutive day.
“I think Apple’s announcement last week is the beginning of the hard news stream,” said Hugh Anderson, director of HighTower Advisors in Las Vegas, Nevada, referring to the iPhone maker’s sales warning about the impact of the virus outbreak.
Numbers that show Dow Jones industrial average status are displayed above the floor after the closing bell on the New York Stock Exchange on Friday
“You see not only a break in the supply chain, but also a break in the demand for products, which is a fundamental challenge for already moderate global growth.”
The Wall Street Anxiety Meter, the CBOE volatility index, reached the highest level in almost three weeks.
The risk-off sentiment increased gold and bond prices, while falling Treasury returns hit equities, with a 1.2% index for the S&P bank index.
A fall in oil prices beat 1.1 percent of the S&P energy index.