BackDow falls 3% as US stocks sell-off deepens on coronavirus fears
All S&P sectors in the red, energy falls mostUS stocks started the session with an attempt to rebound, but were quickly rebuffed as investors noted it had spread to new countries including Spain and Romania
PremiumNew York: Wall Street stocks sank deeper into the red Tuesday afternoon on mounting fears over the coronavirus and its potential to derail global growth.
Near 1930 GMT, the Dow Jones Industrial Average was down 3.1% at 27,102.78.
The broad-based S&P 500 tumbled 3.0% to 3,130.74, while the tech-rich Nasdaq Composite Index shed 2.7% to 8,972.40.
After losing more than 3% Monday, US stocks started the session with an attempt to rebound, but were quickly rebuffed as investors, focused on the potential economic impact of the outbreak, noted it had spread to new countries including Spain and Romania.
Also, the Associated Press reported that a senior member of the International Olympic Committee said organizers are more likely to cancel the 2020 Olympics than to postpone or move it if coronavirus makes it too dangerous to hold in Tokyo.
The US Centers for Disease Control and Prevention said Americans should prepare for possible community spread of coronavirus. Earlier in the day, Iran's death toll from the virus rose to 16, the highest outside China, while dozens of countries from South Korea to Italy accelerated emergency measures.
As a result, US stock indexes were on track for their biggest 4-day percentage drop since December 2018. Fears of a pandemic had knocked off more than 3% on Monday and erasing the S&P 500 and the Dow's gains for the year-to-date.
"For the first time in a while we're finally waking up to the fact that this issue could go on for a while and have a significant impact on Chinese and global economic growth and potentially the United States," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"When people react to it because they don't travel or go to restaurants or go shopping, that'll have an immediate impact on the economy. It depends how long it goes an how wide the spread," he adding, advising that investors wait for at least two days of gains before buying stocks again.
Travel stocks such as Tripadvisor, down 4.8%, and Norweigian Cruise Line Holdings, down 5.2%, underperformed as investors worried about the virus.
All of the S&P's 11 industry sectors were declining on Tuesday though defensive industries such as consumer staples , down 0.95%, fell the least while energy was the biggest loser with a 3% dip.
Last week, positive fourth-quarter corporate earnings and hopes of limited damage from the virus outbreak had pushed Wall Street to record highs.
Some investors had been betting that central banks like the U.S. Federal Reserve would counter any economic weakness resulting from the virus with support such as interest rate cuts. But worries about supply chain disruption curbed this confidence.
"The markets are also coming around to this idea that when it's a problem with the supply side, the central banks are not equipped to deal with these kind of events," said Seema Shah, chief investment strategist at Principal Global Investors in London.
Department store operator Macy's Inc fell 4% despite reporting a smaller-than-expected drop in quarterly same-store sales.
Mastercard Inc shares fell 4.7% after announcing Chief Executive Ajay Banga would step down at the start of the next year and be replaced by products head Michael Miebach.
But shares of Dow-member Home Depot Inc provided a boost, rising 1.2%, after the home improvement chain beat quarterly sales and profit estimates.
HP Inc surged 6%, providing the biggest boost to the S&P, after saying it would step up efforts to slash costs and buy back stock, as it sought investor support to defend against a $35 billion takeover offer from US printer maker Xerox Holdings Corp.
Declining issues outnumbered advancing ones on the NYSE by a 5.10-to-1 ratio. On Nasdaq, a 4.93-to-1 ratio favored decliners.
The S&P 500 posted four new 52-week highs and 34 new lows; the Nasdaq Composite recorded 24 new highs and 144 new lows.
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