US open: Losses continue as coronavirus remains in focus
By Iain Gilbert
Date: Tuesday 25 Feb 2020
(Sharecast News) - US stocks recorded some more losses at the open as market participants' hopes for some positive headlines after the previous session saw both the Dow Jones and Nasdaq Composite record their worst trading sessions in two years were dashed.
As of 1530 GMT, the Dow Jones Industrial Average was down 0.50% at 27,820.37, while the S&P 500 was 0.08% softer at 3,223.22 and the Nasdaq Composite started out the session 0.49% weaker at 9,176.33.
The Dow opened 140.43 points lower on Tuesday after another increase in the number of Wuhan coronavirus cases outside of China fuelled concerns about a potential prolonged global economic slowdown.
With European and Asian markets continuing to head south on Tuesday, AvaTrade's Naeem Aslam said the heavy selloff was an "overreaction".
Aslam said: "Risk off is the name of the trade today. Investors are tensed due to the fear of a prolonged economic slowdown due to the outbreak of Coronavirus was anticipated. In reality, it was nothing more than the market participants overreacting to news of the virus spreading.
"The fact is, nothing significant occurred yesterday which caused both of these indices to surge the way that they did."
Elsewhere, the US 10-year sovereign yield dived below 1.40% - its lowest mark since the 2016 dip.
On the macro front, the housing market picked up steam towards the end of 2019, leading to some improved gains in home values across the US.
In December, home prices rose 3.8% year-on-year, according to the S&P CoreLogic Case-Shiller National Home Price Index, up from the 3.5% gain in November. The 10-City Composite increased 2.4% annually, up from 2% in the previous month.
Still on data, US consumer confidence ticked up in February to its best level in six months as solid employment and cheap fuel prices have seemingly helped Americans overlook past concerns, including the spread of the coronavirus.
The Conference Board's reading increased to 130.7 from a downwardly revised 130.4 in January.
Lastly, the Richmond Fed manufacturing index came in weaker than expected at for February. The index came to -2, well short of the +10 expected on the Street and the 20 reading in January.
In the corporate space, Home Depot shares were up 1.6% in early trade after topping quarterly estimates, while Mastercard shares were around 1% softer after cutting its revenue outlook as a result of the coronavirus.
United Airlines was also flying lower after warning that the virus would likely hurt its top and bottom lines.
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