Coronavirus fears, U.S. business data drag down Wall Street
22 February, 2020, 3:34 pm
NEW YORK (Reuters) – U.S. stocks sold off and the Nasdaq had its worst daily percentage decline in about three weeks on Friday as a spike in new coronavirus cases and data showing a stall in U.S. business activity in February fueled investors’ fears about economic growth.
Declines were led by the technology sector for a second straight session. Tech-related heavyweights Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O) were the biggest drags on the S&P 500.
The S&P technology index .SPLRCT dropped 2.3%. Chipmakers, which have strong ties to China, also fell sharply. The Philadelphia Semiconductor index .SOX ended down 3%.
China reported a jump in new cases on Friday, while South Korea became the latest hot spot, with 100 new cases, and more than 80 people tested positive for the virus in Japan.
“It’s creating a wild card” for companies and investors, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “Going into a weekend not so long after the stock market was hitting highs, people are taking some money off the table.”
Apple earlier this week issued a sales warning, citing the impact of the virus outbreak.
The worries pushed up Wall Street’s fear gauge, the CBOE volatility index , and caused investors to seek safe-haven assets. The VIX hit its highest closing level since Feb. 3.
Gold and bond prices rose and some defensive equity sectors, including staples .SPLRCS, ended the day higher.