fbpx

US Market Gains Went Up in Smoke as Traders Worry Over China Virus

US Market Gains Went Up in Smoke as Traders Worry Over China Virus

NEW YORK, N.Y. – US shares plummeted as the Centers for Disease Control and Prevention (CDC) confirmed the second case of the Wuhan coronavirus in the country.

According to the CDC’s Friday press briefing, the second patient is an elderly Chicago resident who returned from Wuhan on January 13. She is in stable position and is currently quarantined at a hospital in Chicago.

The CDC had already raised the travel notice to Wuhan and recommended that people “avoid all nonessential travel to Wuhan, China.”

The news rattled US financial markets as stocks plummeted. The Dow Jones Industrial Average went down 0.6% or 170.36 points to close at 28,989.73 while the S&P 500 dropped 0.9% or 30.07 points to 3,295.47. The Nasdaq enjoyed a short intraday high before slipping 0.9% or 87.57 points to end the trading day at 9,314.91.

The week also saw all three benchmarks losing. The Dow fell 1.2%, the Nasdaq by 0.8% and the S&P 500 by 1%.

Shares in airlines and various companies in the tourism and travel industry also fell drastically. This sector is expected to be hit the hardest if the China virus outbreak worsens. As it is, American Airlines, Delta Air Lines, and United Airlines are feeling the pressure.

The Las Vegas Sands, Melco Resorts & Entertainment, and Wynn Resorts casino operators are also struggling as they’re dealing with losses of up to 4%. China is a key market for these companies, especially during major holidays like the Lunar New Year. However, there are fears that the Chinese will be traveling and gambling less because of this new outbreak.

Other businesses are also feeling the pinch. Fiat Chrysler, Ford, and General Motors have all restricted travel to China. Most automobile factories in the country are closed due to the Chinese New Year though.

McDonald’s has also temporarily closed all its restaurants in Wuhan and the nearby cities of Ezhou, Huanggang, Qianjiang, and Xiantao. Operations in other cities are ongoing.

Fortunately, Wall Street’s performance received some support from corporate earnings report. 67% of the businesses listed in the S&P 500 exceeded analysts’ expectations while 23% reported lower than expected earnings.

The US Purchasing Manager Activity Index (PMI) also performed better than expected. The HIS Markit PMI was pegged at a 10-month high of 53.1 for January.

Intel and American Express also showed positive results. The chip giant went up by more than 8%, thanks to strong quarterly numbers. The company took advantage of a burgeoning demand for chips to be used in data centers.

Credit card provider American Express also saw their sales go up. However, their new profit fell because of higher costs.

Give a Comment