Yahoo Finance Stocks - Wall Street Extends Losses; CDC Warns Virus Spread 'Might be Bad'
By Yasin Ebrahim
Investing.com – The S&P erased early-day gains Tuesday, resuming the selloff from a day earlier as some on Wall Street cautioned against buying the dips amid a warning from health authorities about the spread of the coronavirus.
The S&P 500 slumped 1.59%, Nasdaq Composite lost 1.21% and the Dow Jones Industrial Average fell 1.60%.
"I would continue to resist, as hard as it is, to simply buy the dip," said Mohamed El-Erian, Allianz (DE:ALVG) chief economic advisor, as new outbreaks in Asia, Europe and the Middle East stoked fears of a coming pandemic.
The Centers for Disease Control and Prevention (CDC) confirmed 53 cases in the U.S. A spate of infections were identified across the Middle East, including two more cases in Oman and six more in Bahrain, while in Europe Switzerland confirmed its first case.
El-Erian's cautious note comes as the World Health Organization warned countries to prepare for the coronavirus, while the CDC said the American public should "prepare for the expectation that this (Covid-19) might be bad."
With fears running high the impact from the virus on global growth could be worse than feared, investors abandoned stocks, with energy, in particular, coming under pressure on demand concerns.
The International Energy Agency's outlook on global oil demand growth has fallen to its lowest level in a decade, IEA Executive Director Fatih Birol said on Tuesday, warning of further demand pressures due to the impact of the coronavirus outbreak.
The selloff in banking stocks continued, paced by an ongoing slump in Treasury yields as investors piled into safe havens, offsetting an improved outlook on trading revenue from JPMorgan Chase (NYSE:JPM).
JPMorgan) said it expects to post a "mid teens" increase in trading revenues for the first quarter.
On the earnings front, Home Depot (NYSE:HD) rose 1% after its fourth-quarter results topped Wall Street estimates on both the top and bottom lines.
Shake Shack's (NYSE:SHAK) fiscal fourth-quarter revenue missed analysts' estimates and guidance also fell short, sending its shares down 13%.
HP (NYSE:HPQ), meanwhile, climbed about 6%, underpinned by fiscal first-quarter earnings that beat consensus estimates and a new plan to return capital to shareholders.
Elsewhere, Tesla rival Nio (NYSE:NIO) rose 13% despite paring some gains, as investors cheered news the cash-strapped Chinese electric automaker was in talks to raise funds and build new factories in China.
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