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US Stocks Follow Global Markets Lower  01/27 09:39

   U.S. stocks tumbled following a sell-off in markets in Europe and Japan 
Monday after China announced a sharp rise in cases of a deadly new virus that 
threatens to crimp global economic growth.

   NEW YORK (AP) -- U.S. stocks tumbled following a sell-off in markets in 
Europe and Japan Monday after China announced a sharp rise in cases of a deadly 
new virus that threatens to crimp global economic growth.

   Every major U.S. index gave up a significant amount of their gains for 
January and bond yields moved lower as investors headed for safer holdings. 
Airlines, resorts and other companies that rely on travel and tourism suffered 
steep losses. Gold prices rose.

   Investors are in a "sell first, ask questions later situation," said Alec 
Young, managing director of global markets research at FTSE Russell.

   The S&P 500 index slumped 1.4% as of 9:46 a.m. Eastern time. The Dow Jones 
Industrial Average dove 420 points, or 1.5%, to 28,571. The Nasdaq fell 1.7%. 
The Russell 2000 index of smaller company stocks fell 1.2%.

   Most markets in Asia were closed for the Lunar New Year holiday, but Japan's 
Nikkei fell 2.03%, its biggest decline in five months. European markets also 
slumped. Germany's DAX dove 2.4%.

   Chinese health authorities have confirmed 2,744 cases of the coronavirus 
along with 81 related deaths as authorities extended a week-long public holiday 
by an extra three days as a precaution against having the virus spread still 
further. Despite the lockdown that has expanded to 17 Chinese cities, the 
coronavirus has spread to a dozen countries, including the U.S.

   Global health authorities are increasingly on alert for any new cases. 
Besides the threat to people's lives and health, investors are worried about 
how much damage the virus will do to profits for companies around the world.

   Even if they're thousands of miles away from Wuhan, the interconnected 
global economy means U.S. companies have plenty of customers and suppliers in 
China. It's the world's second-largest economy, and it accounts for 6% of all 
revenue for S&P 500 companies over the last 12 months. That's nearly double any 
other country besides the United States, according to FactSet.

   "Markets hate uncertainty, and the coronavirus is the ultimate uncertainty 
in that no one knows how badly it will impact the global economy," Young said.

   Resort operators are reeling as the lockdowns in China directly threaten 
their businesses. Wynn Resorts fell 6.3% and Las Vegas Sands shed 6.6%. Those 
companies get the majority of their revenue from the Chinese gambling haven of 
Macao. MGM Resorts fell 3.8%.

   American Airlines fell 6.7% and Delta slipped 3.9% as part of a broad slide 
for airlines because of concerns international travel will decline amid the 
virus' spread.

   Booking companies and cruise-line operators are also getting hurt. Expedia 
Group fell 3.5% and Carnival fell 3.7%.

   Technology companies and banks were also among the losers in the early 
going. Apple, which relies on China for supplies and sales, slumped 2.6%. 
Citigroup fell 2.1%.

   Energy stocks fell broadly as oil prices slipped 1.6%. Schlumberger fell 
3.7%. 

   Utilities and real estate companies held up better than most of the market. 
Both sectors are viewed as less-risky and are little-affected by international 
issues and developments.

   Investors are also dealing with a heavy week of corporate earnings. Apple 
will report financial results on Tuesday. Pharmaceutical giant Pfizer and 
Starbucks will also report.

   Boeing, McDonald's, Coca-Cola and Amazon are also among some of the biggest 
names reporting earnings throughout the week that includes 147 S&P 500 
companies. 


(CZ)

 
 
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