Published: Thu, February 27, 2020
Markets | By Otis Pena

Dow futures tank 1.4% as coronavirus risks deepen

Dow futures tank 1.4% as coronavirus risks deepen

Global stocks tumbled on Wednesday as fears of the novel coronavirus escalating into a worldwide pandemic rattled markets.

Sentiment is very fragile with investors responding to headlines about the virus spreading beyond China, said Candice Bangsund, portfolio manager for Fiera Capital.

The market's recent downward spiral comes amid investors' increased anxiety surrounding the continued spread of the coronavirus in and outside of China, and its impact on the global economy.

"Wall Street is still on course for a slightly positive open but given how quickly Europe has turned south, I'm not confident it will last", said Craig Erlam, senior market analyst at OANDA Europe. There have been musings about cancelling this summer's Olympic Games in Tokyo after five people died from the virus. Brazil has confirmed the first case in Latin America.

Tuesday's sell-off accelerated after USA health officials cautioned that the virus was "likely" to spread throughout the nation.

The virus has claimed nearly 3,000 lives in mainland China but has spread to dozens of other countries. As of 11:08 p.m. ET Sunday, Dow Jones Industrial Average futures had been 387 factors decrease, pointing to an implied opening plunge of 380.41 factors for the index on Monday.

The S&P 500 posted seven new 52-week highs and 23 new lows; the Nasdaq Composite recorded 21 new highs and 154 new lows.

The US 10-year yield is regaining poise, tracking the uptick in the US equity index futures. "That's what markets are reacting to, peak uncertainty, rather than facts". "It's been encouraging to see that the market has held up".

But some technology stocks gained, including Apple, which won 1.6 per cent and Netflix, which surged 5.3 per cent.

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Near the end, Microsoft, one of the market's trillion-dollar glamour stocks downgraded its current march quarter guidance because of the perceived impact of the COVID-19 virus.

"Our base case continues to be that this will continue to be a matter of short-term pain for long-term gain", she said.

"We're not likely to make any progress higher until we have evidence the spread of the coronavirus is decelerating", said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The 30-year Treasury yield was recently down about 3.3 basis points at 1.804 percent after hitting a new record low Monday.

Benchmark U.S. crude oil lost 7 cents to $51.36 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the worldwide standard, shed 5 cents to $55.72 per barrel.

The Canadian dollar traded for 75.31 cents U.S. compared with an average of 75.62 cents USA on Friday.

Gold prices, which rallied at the start of the week, were in the red.

Gold fell $25.50 to $1,646.90 per ounce, silver sank 69 cents to $18.19 per ounce and copper was little changed at $2.59 per pound.

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