Stocks drop amid uncertainty over virus impact; Amazon soars
NEW YORK (AP) — U.S. stocks fell broadly in early trading on Friday amid ongoing uncertainty about the potential economic impact of the virus outbreak that originated in China.
The World Health Organization has declared the pandemic a “global emergency”, a designation that signals the virus is now a significant risk to other countries and requires a global response. Cases have spiked in China, along with deaths there, and the U.S. is now advising against all travel to the world’s second largest economy.
Technology stocks led the losses. Apple, which relies on Chinese consumers for sales and factories for supplies, fell 1.2%. Nvidia slid 1.8% and other chipmakers slipped.
Banks and energy companies also broadly fell. Exxon and Chevron both fell after issuing fourth-quarter results.
The yield on the 10-year Treasury fell to 1.54% from 1.55% late Thursday.
Amazon was the standout in the early going as a stellar earnings report helped push its market value to slightly more than $1 trillion. Colgate-Palmolive and other makers of household goods held up better than most of the market, as did utilities.
KEEPING SCORE: The S&P 500 index fell 0.8% as of 10:15 a.m. Eastern time. The Dow Jones Industrial Average fell 303 points, or 1%, to 28,555. The Nasdaq fell 0.6%. The Russell 2000 index of smaller company stocks fell 0.7%.
OVERSEAS: Markets in Asia were mostly lower, though Japan’s Nikkei 225 rose 1%. Indexes in mainland China open next week after an extended shutdown for the Lunar New Year.
European markets were broadly lower. The United Kingdom is officially leaving the European Union later Friday after more than three years of wrangling over the terms of its exit. It’s the first time a country has left the trading bloc.
VIRUS STATUS: The new virus outbreak that began in China has now spread to more than 20 nations. Most of the more than 9,800 cases and all of the 213 deaths are in China. But, health officials are now increasingly worried as the virus shows signs that it is more easily spreading from person to person.
PRIME RESULTS: Online retailer Amazon surged 8.2% after blowing past Wall Street’s fourth-quarter profit forecasts. The company said Prime membership exploded 50% since it last disclosed that figure in 2018. Analysts have said that Prime subscribers, who pay $119 a year for faster shipping and other perks, typically spend more of their money at Amazon than at other retailers.
LOW TANK: Exxon Mobil slipped 3.1 % after the country’s biggest oil producer’s profit slid more than 5% in the fourth quarter and fell short of Wall Street forecasts. The company is also facing pressure from falling oil prices as the spreading virus threatens demand.
RECOMPUTING: IBM climbed 3.8% after the technology company said it is changing leadership and putting a cloud computing leader at the helm. Arvind Krishna will take over as CEO in April to replace Ginni Rometty, its first female CEO in the company’s century-long history. Cloud computing has become an increasingly important part of the company’s operations and is a highly competitive area.