NEW YORK, Jan 30 — US stocks edged lower today, as the coronavirus epidemic fanned fears of a further hit to China’s economy, while a mixed batch of earnings from technology firms also weighed on sentiment.
The flu-like virus, which has taken 170 lives in China and spread to over 15 countries, has disrupted global travel and led several companies to suspend operations in China, rattling financial markets around the world.
The main US stock indexes are on course for their second weekly declines, with big companies including Apple Inc and Starbucks Corp warning of a financial hit due to disruptions to operations.
The World Health Organisation’s Emergency Committee is due to reconvene on Thursday to decide whether to declare the virus a global emergency.
“The biggest concerns we had last year were trade policy uncertainty and slower global growth and we were kind of expecting global growth to pick up,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“So it’s (the epidemic) kind of a setback. But valuations were pretty high so it’s an excuse for markets to take profits.”
Earlier, the US Commerce Department reported the domestic economy expanded at a 2.1 per cent annualized rate in the fourth quarter, in line with economists’ expectations, but the annual growth of 2.3 per cent missed the Trump administration’s 3 per cent target.
At 9.53am ET, the Dow Jones Industrial Average dipped 0.18 per cent to 28,681.29. The S&P 500 fell 0.35 per cent to 3,261.85 and the Nasdaq Composite dropped 0.13 per cent at 9,263.10.
Overall, analysts expect profit for S&P 500 companies to be flat in the fourth quarter versus a 0.6 per cent decline estimated at the start of the season, according to Refinitiv data.
Helping check losses on the Dow and the Nasdaq, Microsoft Corp gained 2.9 per cent after it beat expectations for quarterly earnings, driven by Azure cloud computing revenue growth.
Tesla Inc shares jumped 11.3 per cent after the electric carmaker posted its second quarterly profit in a row as vehicle deliveries hit a record.
Among big decliners was Facebook Inc, falling 6.2 per cent after saying growth would continue to slow as its business matured and it reported a surge in quarterly expenses.
Altria Inc dropped 6 per cent after the tobacco company said it took another US$4 billion charge on its investment in Juul Labs Inc.
Declining issues outnumbered advancers for a 2.03-to-1 ratio on the NYSE and a 1.88-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and 12 new lows, while the Nasdaq recorded 24 new highs and 56 new lows. — Reuters
