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The US equity market finished lower for the second straight session on Friday, 21 February 2020, as investors risk sentiments dented after as a spike in new coronavirus cases in China and other countries and as data showing U.S. business activity stalled in February. At closing bell, the Dow Jones Industrial Average fell 227.51 points, or 0.8%, to 28,992.40. The S&P 500 lost 35.48 points, or 1.05%, to 3,337.75. The Nasdaq Composite Index lost 174.37 points, or 1.8%, to finish at 9,576.59. For the week, the Nasdaq Composite lost 1.6%, while the Dow fell 1.4% and the S&P 500 shed 1.3%.
The stock market opened lower and worsened after IHI Markit reported its preliminary composite purchasing managers index for February. It came in at 49.6, sharply below January's 53.1 tally. Readings below 50 indicate economic contraction.
The spread of the virus inside and outside of China has been unsettling the market lately. The coronavirus outbreak contains a significant likelihood of impact to the global economy and the potential to become a black-swan type event. Economists at Standard Chartered Bank on Friday estimated that COVID-19 epidemic could affect 30% of China's imports and 10% of its exports, prompting them to lower their gross domestic product forecast for China this year to 5.5% from 5.8%.
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. South Korea has reported 48 more cases, bring its total infections from the novel coronavirus to 204, and in Japan, officials from Tokyo and Osaka said they wouldn't hold large events such as school graduation ceremonies and entrance examinations for three weeks through mid-March, in an effort to contain the viral outbreak.
Meanwhile, the World Health Organization said Friday that there are 76,767 confirmed cases of the illness and 2,247 deaths, marking another day in which the number of new cases world-wide has slowed.
Shares of Virgin Galactic Holdings Inc lost 9.1% after a powerful rally this week. Shares remain up 17.6% for the week.
T-Mobile US Inc. shares declined 0.9% after it revised its merger terms with Sprint Corp.
Dropbox Inc jumped after it raised its outlook for operating margin, and Deere & Co rose after an unexpected rise in first-quarter profit.
Sprint Corp climbed 5.7% as it announced new merger terms with T-Mobile US that would reduce the stake of major Sprint shareholder SoftBank. T-Mobile shares dipped 0.9%.
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