Stocks end lower amid concerns over new coronavirus in China
Sentiment in the stock market was downbeat as investors returned from a long holiday weekend to headlines regarding a new disease originating in China that has health officials worldwide on alert. The major averages were holding in fairly well until headlines crossed that the CDC was confirming it has found the first travel-related case of 2019 coronavirus in the U.S. The losses were worst on the Dow, which was weighed on by a slide in Boeing (BA) shares precipitated by the planemaker's confirmation that it now estimates that the ungrounding of the 737 MAX won't begin until the middle of this year.
ECONOMIC EVENTS: In the U.S., no market moving economic data was reported. Of note, the IMF issued a forecast for global growth of 3.3% this year, up from the projected 2.9% for 2019 and marking the fund's first projected acceleration in growth in three years.
In other news, the Centers for Disease Control and Prevention confirmed the first case of 2019 Novel Coronavirus in the U.S. in the state of Washington.
TOP NEWS: Boeing (BA) shares dropped 3.3% after the company said that it estimates the ungrounding of its 737 MAX aircraft will begin during mid-2020. "We acknowledge and regret the continued difficulties that the grounding of the 737 MAX has presented to our customers, our regulators, our suppliers, and the flying public," the company said in a statement. "We will provide additional information about our efforts to safely return the 737 MAX to service in connection with our quarterly financial disclosures next week."
Shares of pharmaceutical makers were among the day's outperformers amid reports of the new respiratory virus originating in China that has infected almost 300 people and killed six. Meanwhile, Macau casino operators Las Vegas Sands (LVS), Wynn Resorts (WYNN), MGM Resorts (MGM) and Melco Resorts (MLCO), as well as a number of airlines and other travel-linked stocks, fell amid investors’ concerns over the potential impact on tourism as the virus continues to spread.
Halliburton (HAL) reported better than expected fourth quarter earnings and revenue, noting that in 2020 it expects its international growth to continue and for its North American customer spending to be down again this year.
VF Corporation (VFC) announced it is commencing a review of strategic alternatives for the occupational portion of its Work segment in a bid to make that business "into a more consumer-minded and retail-centric enterprise."
Meanwhile, Tesla (TSLA) shares gained 7.2% after Bloomberg reported that the car maker has reached a settlement with the state of Michigan over its federal lawsuit challenging a state ban on direct-to-consumer car sales.
MAJOR MOVERS: Among the noteworthy gainers was Owens & Minor (OMI), which rose almost 18% after Baird analyst Eric Coldwell upgraded the stock to Outperform from Neutral. Also higher was Beyond Meat (BYND), which gained 18.4% after the CEO of Starbucks (SBUX) said in a public letter that the company wants to add more plant-based options and move "toward a more environmentally-friendly menu."
Among the notable losers was Arrowhead Pharmaceuticals (ARWR), which fell 15.6% after SVB Leerink initiated coverage of the stock with an Underperform rating and $32 price target. Also lower was WW (WW), which slid 10.4% after Noom said that 55,000 signed up to lose weight with the smartphone app on New Year's Day.
INDEXES: The Dow fell 152.06, or 0.52%, to 29,196.04, the Nasdaq lost 18.14, or 0.19%, to 9,370.81, and the S&P 500 declined 8.83, or 0.27%, to 3,320.79.