US stocks join global rout on virus, Dow ends -3.6%

PTI, Feb 25, 2020, 1:51 PM IST

New York: Wall Street stocks finished with steep losses on Monday, joining a global rout as worries mounted that the new coronavirus will derail economic growth.

The benchmark Dow Jones Industrial Average plunged 3.6 per cent to 27,960.80, a drop of more than 1,000 points and the biggest loss in a session in more than two years.

The broad-based S&P 500 slumped 3.4 per cent to 3,225.89, while the tech-rich Nasdaq Composite Index tumbled 3.7 per cent to 9,221.28.

The selloff left all 11 industrial sectors in the red, with energy and technology shares suffering the biggest losses. Airlines and other travel-oriented stocks were also hammered.

Analysts attributed the ugly session to the news that the coronavirus had spread over the weekend more rapidly outside of China. Italy has locked down 11 towns and South Korea ordered all 2.5 million residents of the city of Daegu to remain indoors.

“The market reaction is a classic ‘sell now and ask questions later,'” said Quincy Krosby, chief market strategist for Prudential Financial.

Krosby said the virus has come on the heels of an earnings season in which companies were “remarkably positive” about the outlook, lifting equities to records.

“What is the effect on global growth if this continues and, therefore, what is the effect on corporate earnings?” Krosby asked.

Several members of the Dow lost almost five per cent, including Apple, Exxon Mobil, American Express and Walgreens Boots Alliance.

American Airlines plunged 8.5 per cent, while Marriott International tumbled 5.9 per cent and Booking Holdings 7.1 per cent.

An exception was Gilead Sciences, which surged 4.6 per cent following upbeat comments from a World Health Organization official about the company’s remdesivir, an experimental drug to treat the virus.