Wall Street tumbles as coronavirus fears mount

(Reuters) – U.S. stock indexes fell about 1% on Thursday, dragged down by technology heavyweights, as investors fretted over a rise in the cases of coronavirus and its economic impact.

Some traders pointed to a Global Times report here that said a central Beijing hospital reported 36 new cases as of Thursday, sparking a fresh wave of selling in late morning trade.

The report said those infected at Fuxing Hospital in Xicheng district were eight medical workers, nine cleaning staff and 19 patients along with their families, leading many to fear a potential explosion in infection numbers in the capital.

“The story suggests that the virus has spread to medical workers and people who help clean hospitals, so the markets are shook up by that,” said Keith Bliss, senior vice-president at Cuttone & Co in New York.

Investors were already on the edge as the number of new cases climbed in South Korea, Japan reported two new deaths and research suggested that the virus was spreading faster than previously thought.

Recent policy easing by China, a largely better-than-expected fourth-quarter earnings season and hopes that the economic jolt from the coronavirus will be short-lived have pushed Wall Street’s main indexes to new highs in recent weeks.

Lou Brien, a market strategist at DRW Trading in Chicago, said, “what’s happening is that we had a very rapid move in stocks and it could be that one strategy bumped into another and all of a sudden someone had to liquidate.”

Recent data from China had pointed to a slowdown in the outbreak, but the figures partly reflected a change in the diagnostic method, raising worries over whether the daily tallies accurately reflect the spread of the virus.

At 12:11 p.m. ET, the Dow Jones Industrial Average was down 283.37 points, or 0.97%, at 29,064.66, the S&P 500 was down 32.79 points, or 0.97%, at 3,353.36. The Nasdaq Composite was down 139.82 points, or 1.42%, at 9,677.37.

Technology stocks led the slide, with Microsoft Corp down 2.5% and Apple Inc and Amazon.com Inc dropping 1.3% each.

In other corporate news, ViacomCBS Inc slumped 16.8% as its earnings fell short of revenue and profit expectations in its first quarterly earnings results since closing its merger.

E*Trade jumped 24% after Morgan Stanley offered to buy it in a $13 billion stock deal, the biggest acquisition by a Wall Street bank since the financial crisis.

Declining issues outnumbered advancers for a 1.23-to-1 ratio on the NYSE and for a 1.68-to-1 ratio on the Nasdaq.

The S&P index recorded 33 new 52-week highs and four new lows, while the Nasdaq recorded 118 new highs and 45 new lows.

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