INSTANT VIEW-US stocks enter correction territory on pandemic fears

INSTANT VIEW-US stocks enter correction territory on pandemic fears

NEW YORK, Feb 27 (Reuters) – Wall Street’s main indexes tumbled at the open on Thursday, putting them more than 10% below record highs set earlier this month and entering correction territory, as the rapid spread of the coronavirus globally deepened worries about growth and corporate earnings.

The number of new infections in China was overtaken for the first time by fresh cases elsewhere on Wednesday, most notably in Italy and Iran, while the U.S. Centers for Disease Control and Prevention confirmed an infection in California in a person who reportedly did not have relevant travel history or exposure to another known patient.

COMMENTS MICHAEL O’ROURKE, CHIEF MARKET STRATEGIST, JONESTRADING, STAMFORD, CONNECTICUT “It’s a continued escalation. The virus is in 47 countries. The CDC said we had first case of unknown origin. That’s obviously alarming. There was a negative preannouncement from Microsoft … It looks like it’s going to lead to a larger slowdown in the global economy than the market was expecting.”

“The President likes to do whatever he can to talk up the stock market. There’s a concern he’s not candid with news and information.”

“I think we’ll test the 3,000 (S&P 500) level as support. I’m not sure if that’s where the move’s going to stop or not.”


“There’s the news overnight about the first case in the U.S. where we don’t have a good read about where the case came from. It’s the first time they’ve talked about community spread. That’s one more sign of the concerns people have. It’s a ‘sell first, ask questions later’ type of environment.”

“As far as the long-term impact on corporate earnings and the economy, we don’t believe there will be a huge change in the paradigm. I don’t think it ruins the year. But there will be a significant impact on the next quarter or two. If you believed in the thesis of this being a year of global growth, you’d have to delay that thesis by three to six months.” “Things can change quickly, but our base case is that similar to 2018, we don’t believe there will be a recession, we don’t believe there will be a bear market.”

(Compiled by Alden Bentley)

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