Indexes fall, led by tech decline on mounting fears coronavirus could spread

NEW YORK (Reuters) – U.S. stocks fell on Thursday, led down by technology heavyweights, after reports of new coronavirus cases in China and other countries intensified fears over its spread and impact on the global economy.

Investors were unnerved by a quick, sharp drop in indexes in late morning trade, with some traders attributing the move to a Global Times report that a central Beijing hospital had reported 36 new cases. This raised worries about a potential explosion of infections in the capital.

Investors were already skittish after Japan reported two new deaths and South Korea reported a rise in new infections. Research suggested the virus was spreading faster than previously thought.

“The overlying question is the uncertainty over the coronavirus and whether it’s going to spread further and impact global economic activity before things stabilize and ultimately get better,” said Michael Sheldon, executive director and CIO at RDM Financial Group at Hightower in Westport, Connecticut.

He said investors were taking profits in some of the better-performing technology names.

Tech stocks declined 1.1%. Microsoft Corp, Apple Inc and Inc dropped about 1% each and weighed the most on the benchmark index.

The Dow Jones Industrial Average fell 161.99 points, or 0.55%, to 29,186.04, the S&P 500 lost 17.31 points, or 0.51%, to 3,368.84 and the Nasdaq Composite dropped 81.81 points, or 0.83%, to 9,735.37.

Recent policy easing by China, a largely better-than-expected fourth-quarter earnings season and hopes that the economic jolt from the coronavirus will be short-lived have pushed Wall Street’s main indexes to new highs in recent weeks.

E*Trade jumped 22% after Morgan Stanley offered to buy it in a $13 billion stock deal, the biggest acquisition by a Wall Street bank since the financial crisis.

In other corporate news, ViacomCBS Inc slumped 17.1% as its earnings fell short of revenue and profit expectations in its first quarterly earnings results since closing its merger.

Advancing issues outnumbered declining ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored advancers.

The S&P 500 posted 40 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 131 new highs and 54 new lows.

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