US open: More losses at the bell as coronavirus hits US firms
By Iain Gilbert
Date: Thursday 27 Feb 2020
(Sharecast News) - US stocks recorded more heavy losses at the bell on Thursday as the Wuhan coronavirus continued to spread and some more big names warned on guidance in the wake of the outbreak.
As of 1535 GMT, the Dow Jones Industrial Average was down 2.31% at 26,333.91, while the S&P 500 was 2.32% softer at 3,043.97 and the Nasdaq Composite started out the session 2.64% weaker at 8,743.90.
The Dow opened 623.68 points lower after the benchmark index saw out the previous session in the red and the S&P 500 fell even further following its worst two-day run in four years.
The early losses on Thursday saw the S&P 500 breach its 200-day moving average for the first time in nine months and the Dow also entered correction territory.
The 10-year Treasury yield was also trading at a record low of 1.25%, while gold prices rose 0.6% to $1,653.50 per ounce amid concerns over the Wuhan coronavirus outbreak spreading even further and after a Food and Drug Administration official said the coronavirus was on the cusp of being declared a pandemic.
As far as coronavirus headlines overnight went, the news wasn't great there either.
South Korea announced another 169 cases, bringing its total to 1,146, while Italy said infections now totalled 325 and were being seen outside of the original epicentre in the country's north. China reported 406 new confirmed cases and a further 52 deaths.
Donald Trump's televised address overnight on the coronavirus, which saw him place Vice President Mike Pence in control of managing the outbreak, also seemingly failed to calm markets as his optimistic tone was paired with warnings from health experts.
CMC Markets analyst Michael Hewson said: "The sharp declines in equity markets in the last week have turned investor sentiment on its head in a fashion that is almost schizophrenic in nature.
"From the unshakeable optimism seen at the beginning of the year, investors have done a complete U-turn switching from excessive optimism to outright pessimism in less than a week."
On the macro front, jobless claims in the US edged slightly higher last week. According to the Department of Labor, initial unemployment claims rose by 8,000 to reach 219,000 during the week ending on 22 February (consensus: 215,000).
Elsewhere, data on orders in the States for goods made to last more than three years in January came in much stronger than expected, while orders for civilian aircraft more than trebled. According to the Department of Commerce, durable goods orders slipped at a month-on-month pace of 0.2% to reach $246.2bn.
Lastly, pending home sales rose 5.2% in January and were 5.7% higher year-on-year, according to the National Association of Realtors.
"This month's solid activity - the second-highest monthly figure in over two years - is due to the good economic backdrop and exceptionally low mortgage rates," said the NAR's chief economist Lawrence Yun.
In the corporate space, shares in tech giant Microsoft were down 4% at the opening bell after the company warned shareholders that its operations in China were returning to normal at a slower than expected pace, while PayPal shares were down 1.3% after also issuing a warning on its outlook.
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