Portfolio

US open: Early losses as coronavirus outbreak remains in focus

By Iain Gilbert

Date: Thursday 23 Jan 2020

US open: Early losses as coronavirus outbreak remains in focus

(Sharecast News) - Wall Street stocks recorded some early losses at the bell on Thursday as the spread of the Chinese coronavirus continued to dampen the mood in global capital markets.
As of 1530 GMT, the Dow Jones Industrial Average was down 0.33% at 29,089.44, while the S&P 500 was 0.27% weaker at 3,312.69 and the Nasdaq Composite started out the session 0.10% softer at 9,374.41.

The Dow opened 96.83 points lower on Thursday after a mixed performance on the Street in the previous session as corporate releases continued to stream in, with markets' focus still trained firmly on the risk that a deadly virus in China might spread.

With the death toll rising to 17, the World Health Organization was slated to meet during the day in order to decide whether or not to declare a global health emergency.

Confirmed cases of the virus, which originated in China's Wuhan city, had already reached 571 and had also been detected throughout Asia and as far away as the US.

Asian markets tumbled overnight, while Chinese Treasury futures surged amid concerns over the potential economic fallout.

The 10-year Treasury note yield also started the session lower, falling by five basis points to 1.728%.

In the corporate space, Comcast was down 2.5% in early trade despite some better-than-expected quarterly figures, while Procter & Gamble inched ahead 0.24% despite a sales miss.

United Airlines flew 0.20% lower despite breaking a holiday record, while Union Pacific shares steamed ahead 2.35% following a miss on both earnings and profits

Oanda's Edward Maya said: "US stocks are losing momentum in what has been a very good start to earnings season as Asia braces for the impact of the coronavirus.

"Earnings results came in mixed this morning after strong results from Comcast but softer revenue from P&G. Union Pacific also reported results that showed a strong decline with carloads, but shares climbed higher after the outlook painted a rosier picture than what CSX forecasted last week."

Intel was due to report earnings after the close of markets in New York.

On the data front, a key leading indicator of joblessness in the US continued to point to better-than-expected conditions.

According to the US Department of Labor, initial unemployment claims for the week ending on 18 January rose by 6,000 to 211,000 (consensus: 215,000).

The four-week moving average on the other hand, which smoothes out the volatility in the data from one week to the next, fell by 3,250 to 213.250.

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