U.S. stocks shed the modest gains they had made in early trading and veered mostly lower Wednesday afternoon
By
ALEX VEIGA AP Business Writer
February 26, 2020, 7:22 PM
3 min read
NEW YORK -- U.S. stocks shed the modest gains they had made in early trading and veered mostly lower in Wednesday afternoon, deepening the market's losses for the week.
Worry about economic fallout from the virus outbreak that originated in China fueled a sharp sell-off this week that wiped out the market's gains for the year.
The virus continues to spread and threatens to hurt industrial production, consumer spending, and travel. More cases are being reported in Europe and the Middle East. Health officials in the U.S. have been warning Americans to prepare for the virus.
Energy companies led the selling Wednesday as oil prices declined. Comarex Energy lost 4.9%. Cruise operators including Royal Caribbean and Carnival continued to fall sharply, deeping a rout that began a month ago. Both stocks have lost more than 30% over the past month.
Companies that rely on consumer spending and industrial stocks also fell. Those losses outweighed gains in technology and health care stocks.
The tech sector was among the worst hit by sell-offs this week as many of the companies rely on global sales and supply chains that could be stifled by the spreading outbreak. Microsoft rose 0.8% and Adobe rose 0.6%.
Drugmaker Pfizer rose 2.7% was among the gainers in the health care sector.
Bond prices continued to rise, pushing yields lower. The yield on the 10-year Treasury slipped to 1.31% from 1.33% late Tuesday. The yield on the 3-month Treasury bill edged up to 1.51%.
TJX, the parent of retailer TJ Maxx, surged 6.3% after beating Wall Street's fourth-quarter profit forecasts and raising its dividend.
VIRUS UPDATE: The virus outbreak has now infected more than 81,000 people globally and continues spreading. Brazil has confirmed the first case in Latin America. Germany, France and Spain were among the European nations with growing caseloads. New cases are also being reported in several Middle Eastern nations.
President Donald Trump will hold a news conference later Wednesday, along with representatives from the Centers for Disease Control, to discuss the virus.
KEEPING SCORE: The S&P 500 fell 0.2% as of 2 p.m. Eastern time. Following its two-day drop, the index is down 7.9% from the record high it reached last Wednesday.
The Dow Jones Industrial Average slid 146 points, or 0.5%, to 26,934. The Nasdaq edged up 0.1%. The Russell 2000 index of smaller company stocks fell 1.1%.
European markets were mostly higher and Asian markets fell.
MOUSE EXIT: Disney fell 4.2% following Bob Iger’s surprise announcement that he will immediately step down as CEO of the giant entertainment company. Iger steered the company’s absorption of big moneymakers, including Star Wars, Pixar, Marvel and Fox's entertainment businesses. He also oversaw the launch of the Disney Plus streaming video service.
LINGERING MALADY: Cruise operators and some other companies that depend on travelers continued falling as virus fears persist. Norwegian Cruise Line Holdings fell 6.7% and Expedia lost 5.7%.
BUSTED BUILDER: Toll Brothers slid 13.6% after the homebuilder reported disappointing fiscal first-quarter profit. The poor results initially weighed on some of its rivals, but most of them recovered by midday. A government report Wednesday showed that sales of new homes jumped 7.9% in January to the fastest pace in more than 12 years.
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AP Business Writer Damian J. Troise contributed.
