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Wall St stumbles as virus fears mount

Stephen Culp

Wall Street fell in a broad sell-off on Friday, as investors fled equities on growing concerns over the scope of the coronavirus outbreak, capping the S&P 500's worst week in six months.

All three major US stock averages turned sharply negative, with the S&P 500 seeing its biggest one-day percentage drop in over three months after the Centre for Disease Control and Prevention confirmed the second case of the virus on US soil, this time in Chicago.

S&P 500 and Dow wrapped up their worst week since August and the Nasdaq snapped a six-week winning streak.

Market participants kept a wary eye on developments surrounding the coronavirus, which the World Health Organisation (WHO) deemed "an emergency in China," having now killed 26 people and infected more than 800 on the eve of the Lunar New Year holiday.

"Markets hate uncertainty and the virus has been enough to inject uncertainty in the markets," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

But some analysts believe the investors were looking for a reason to take money off the table.

"The virus is really more an excuse to take profits right now," said Sam Stovall, chief investment strategist of CFRA Research in New York.

Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, agreed. "The markets are expensive and were looking for a reason to go down, and (the virus) is the excuse to do it."

Intel Corp's stock surged 8.1 per cent after reporting jumps in data centre and cloud computing revenue and forecasting better-than-expected 2020 earnings.

Consumer credit company American Express benefited from a robust US retail sales environment, posting a better-than-expected 9 per cent annual revenue increase. Its stock advanced 2.8 per cent.

Fourth-quarter reporting season is well under way, with 74 companies in the S&P 500 having reported, 68.2 per cent of which have beaten Wall Street estimates.

Analysts now expect earnings to have contracted by 0.5 per cent, on aggregate, in the October to December quarter.

Next week, a swarm of closely watched results are expected, notably from Apple, McDonald's, Starbucks, Tesla, Amazon.com, Boeing, Facebook and Caterpillar, among others.

The Dow Jones Industrial Average fell 170.36 points, or 0.58 per cent, to 28,989.73, the S&P 500 lost 30.09 points, or 0.90 per cent, to 3,295.45 and the Nasdaq Composite dropped 87.57 points, or 0.93 per cent, to 9,314.91.

Of the 11 major sectors in the S&P 500, all but utilities ended the session in the red, with healthcare and financial suffering the largest percentage losses.

Declining issues outnumbered advancing ones on the NYSE by a 2.33-to-1 ratio; on Nasdaq, a 2.94-to-1 ratio favoured decliners.

Volume on US exchanges was 7.96 billion shares, compared with the 7.13 billion average over the last 20 trading days.