Stocks are looking set to close out a tough week with a down day as more than 35M people are effectively under quarantine in China, travel bans have been issued, tourist sites and famous temples have been closed and Shanghai Disneyland (DIS) will be closing while McDonald's (MCD) has suspended operations indefinitely in five cities there amid the outbreak of the 2019 Novel Coronavirus, or 2019-nCoV. In the U.S., the Centers for Disease Control and Prevention confirmed the second infection with 2019-nCoV in the United States has been detected in Chicago, Illinois. The virus scare has drawn the spotlight away from corporate earnings with nearly 20% of the companies in the S&P 500 having now reported and the pace of reports about to pick up significantly in the coming week.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI fell by 0.7 to a flash reading of 51.7 for January. Meanwhile, West Texas Intermediate crude prices are tracking to the end the week with a more than 7% slide as the coronavirus outbreak raises new questions about oil demand.
Markets in China, South Korea, and Taiwan were closed for Lunar New Year holidays.
TOP NEWS: Shares of Intel (INTC) have jumped 9% after the company's results for the fourth quarter beat analysts' expectations on both the top and bottom lines. Intel also gave an upbeat outlook for its current quarter and announced a 5% dividend increase.
Shares of Discover Financial Services (DFS) have plunged 9% after the company reported quarterly results. While the company's earnings per share beat the consensus view, the company issued a higher than expected expense outlook for 2020 as it plans to invest back in its business. On the flipside in the credit card space, shares of American Express (AXP) are up 2% following the company's Q4 report and 2020 guidance.
In M&A news, Changyou.com (CYOU) announced an agreement to be acquired by the Sohu Group (SOHU) in an all-cash transaction implying an equity value of the company of approximately $579M, or $10.80 per American depositary share in cash. Additionally, Cincinnati Bell (CBB) announced that it received a non-binding proposal from an infrastructure fund to acquire all of the outstanding shares of common stock of Cincinnati Bell for $12.00 per share in cash. As previously announced in December, Cincinnati Bell entered into a definitive agreement through which Brookfield Infrastructure (BIP) and its institutional partners would acquire all of its outstanding shares for $10.50 per share in cash. Cincinnati Bell has commenced discussions with the fund regarding the proposal, the company stated.
MAJOR MOVERS: Among the noteworthy gainers were eHealth (EHTH) and Altassian (TEAM), which gained a respective 31% and 8% after reporting quarterly results.
Among the notable losers was Harsco (HSC), which slid 16% after it reported preliminary Q4 revenue. Also lower were Synchrony Financial (SYF) and Ericsson (ERIC), which fell 10% and 6%, respecively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 105.58, or 0.36%, to 29,054.51, the Nasdaq was down 40.32, or 0.43%, to 9,362.16, and the S&P 500 was down 19.07, or 0.57%, to 3,306.47.
Intel
+5.53 (+8.73%)
American Express
+2.81 (+2.14%)
Discover
-7.87 (-9.18%)
Changyou.com
+0.8 (+8.06%)
Sohu.com
+0.2 (+1.78%)
Cincinnati Bell
+2.665 (+23.66%)
Brookfield Infrastructure Partners
-0.07 (-0.13%)
eHealth
+30.23 (+31.14%)
Atlassian
+10.47 (+7.88%)
Harsco
-3.1 (-15.95%)
Synchrony
-3.42 (-9.45%)
Ericsson
-0.57 (-6.35%)