US close: Stocks close lower as Coronavirus cases climb past 31,000
By Iain Gilbert
Date: Saturday 08 Feb 2020
(Sharecast News) - US stocks closed lower on Friday despite a stronger-than-expected reading on the US jobs market for January as companies around the world warned that the Wuhan coronavirus would impact their top and bottom lines.
At the close, the Dow Jones Industrial Average was down 0.94% at 29,102.51, while the S&P 500 and Nasdaq Composite saw out the session 0.54% weaker at 3,327.71 and 9,520.51, respectively.
The Dow closed 277.26 lower on Friday after China's National Health Commission reported overnight that the number of cases of the 2019-nCoV Coronavirus had climbed past 31,000 and fatalities to more than 630.
Just before the opening bell on Wall Street, high-end parka maker Canada Goose joined the likes of Burberry, Toyota Motor and key Apple supplier, Hon Hai Precision in cautioning investors that the virus would most certainly take its toll on profits.
Mark Wall at Deutsche Bank said: "The spread of the virus is showing signs of peaking but the outbreak is expected to have had a sharp impact on China economic activity already in Q1.
"A lesser economic shock is expected to be transmitted to the broader Asia economy including Japan. A more moderate shock should be felt in the US and Europe. The assumption is that the virus peaks in February and economic activity will recover over the remainder of the year and into 2021."
For the week, however, the S&P remained on track for a gain of over 3.0%.
On the macro front, US non-farm payrolls jumped by 225,000 in January (consensus: 160,000) and the year-on-year rate of wage growth picked up from 2.9% in December to 3.1%, the Department of Labor reported on Friday.
Despite that, US Treasuries moved higher again, echoing the slight caution evident in stocks, with the yield on the 10-year note down by six basis points to 1.58%.
Economists put part of the strength in hiring down to January having seen the third mildest temperatures for that month on record.
In the corporate space, shares of fashion retailer Canada Goose fell 4% as the company lowered its full-year sales outlook on the back of the coronavirus outbreak.
Uber was in the driver's seat after bringing forward its expected date for turning EBITDA positive to the last quarter of 2020. Full-year 2020 outlook for losses before interest, taxes, depreciation and amortisation of $1.25-1.45bn was also better than the $1.73bn of red ink expected on the Street.
Rare disease specialist Abbvie climbed 3% after it posted fourth-quarter net income of $2.21 per share, while Pennsylvania-based Avantor skidded 7% lower even after the manufacturer of high-performance materials guided towards an up to 65% jump in free cash flows in 2020.
Stocks in Twitter were down 4% despite analysts at Bank of America hiking their target price for the shares from $39.0 to $43.0.
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