Stocks slip as coronoavirus cases increase outside of China
Stocks have been under pressure since the open after new COVID-19 virus cases were reported in China, South Korea, Japan and Iran. Data releases overnight highlighted the impact of the spreading coronavirus on growth not just in China, with preliminary Purchasing Managers Index numbers out of Japan and Australia showing sharp drops in composite readings. Meanwhile, on the domestic data front, flash PMI readings from Markit for February were also down from last month, adding to concerns about the coronavirus slowdown being a global phenomenon.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI dropped 1.1 points to 50.8 in the flash February report. Meanwhile, the February services index tumbled 4 points to 49.4, making for its worst print since October 2013. Existing home sales fell 1.3% to a 5.46M rate in January.
TOP NEWS: Shares of Deere (DE) have jumped 8% after the agricultural equipment maker reported better than expected sales and earnings, stating that its first quarter performance reflected early signs of stabilization in the U.S. farm sector. While saying that it is encouraged by early signs of stabilization in 2020, Deere also said it is closely monitoring any coronavirus impacts on suppliers and getting parts to operations internationally.
Sprint (S) shares are up 6% after the company and T-Mobile US (TMUS) announced that they have amended their merger agreement. Following the closing, Deutsche Telekom (DTEGY) and SoftBank (SFTBY) are expected to hold approximately 43% and 24%, respectively, of the fully diluted New T-Mobile shares, with the remaining approximately 33% held by public shareholders. Following the change in the terms, the companies now see the deal closing as early as April 1.
First Solar (FSLR) has slid 15% after the company posted disappointing Q4 results, mainly owing to project slippage. First Solar also announced that it is reviewing options for its U.S. project development business in light of the "significant evolution" of developing utility-scale PV projects in the country and the contention from CEO Mark Widmar that "First Solar, at its core, is a technology and module manufacturing company."
MAJOR MOVERS: Among the noteworthy gainers was Chewy (CHWY), which rose 4% after RBC Capital analyst Mark Mahaney upgraded the stock to Outperform from Sector Perform with an unchanged $38 price target.
Also higher were Eldorado Gold (EGO) and Dropbox (DBX), which gained a respective 25% and 22% after reporting quarterly results.
Among the notable losers was Cheetah Mobile (CMCM), which slid 16% after the company confirmed that some of its Google (GOOGL) accounts have been disabled.
Also lower were Valaris (VAL) and Appian (APPN), which fell 21% and 18%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 183.47, or 0.63%, to 29,036.51, the Nasdaq was down 114.06, or 1.17%, to 9,636.90, and the S&P 500 was down 25.68, or 0.76%, to 3,347.55.