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Stocks fell on Thursday with most of the losses coming in a sudden, rapid move midday.
Traders did not have an immediate reason for the decline other than possible technical factors and an increased risk-off sentiment stemming from fears of the coronavirus slowing the global economy
The Dow Jones Industrials lost 128.05 points, way off their lows of the day to conclude Thursday at 29,219.98. The 30-stock average went from trading down about 200 points to a session low of down 388 points in roughly two minutes before rebounding.
The S&P 500 slumped 12.92 points to 3,373.23.
The tech-heavy NASDAQ dropped 66.21 points to 9,750.96. Thursday’s moves come a day after the S&P 500 and NASDAQ hit record highs.
Some traders pointed to a report from the Chinese state-run Global Times, which said there had been a sharp increase in coronavirus cases.
While the timing of the story did not match with Thursday’s move lower, it does tap into the market’s fears about the coronavirus weighing on the global economy.
Goldman Sachs slid 2%. Intel was the worst-performing stock in the Dow, falling 2.5%. Apple shares dipped by 1%.
Fed Vice Chairman Richard Clarida told the media he prefers to look at economists’ forecasts over futures markets on Fed rates. Clarida noted the majority of economists do not expect a rate cut soon from the Fed.
China’s National Health Commission on Wednesday reported that 74,576 cases of the new coronavirus have now been confirmed, with 2,118 deaths on the mainland. Coronavirus cases are also spiking in South Korea. The country said confirmed cases have jumped to 82, more than double the previous number of cases.
S&P Global Ratings warned in a report on Thursday that Chinese lenders could be hit by as much as $1.1 trillion in questionable loans as the coronavirus ripples through China’s economy, while Goldman Sachs has said that markets are underestimating the potential fallout from the outbreak, suggesting the "risks of a correction are high."
To be sure, China’s central bank cut its one-year loan prime rate by 10 basis points overnight in an effort to mitigate the economic fallout from the coronavirus. A summary of the Fed’s January meeting also showed the U.S. central bank is monitoring the spread for any impact on the U.S. economy.
On the data front, weekly jobless claims were in line with expectations at 210,000. The Philadelphia Fed business index surged to 36.7 in February from 17 in January.
Prices for the 10-Year U.S. Treasury gained sharply, lowering yields to 1.52% Wednesday’s 1.57%. Treasury prices and yields move in opposite directions.
Oil prices picked up 48 cents to $53.77 U.S. a barrel.
Gold prices hiked $10.70 to $1,622.50 U.S. an ounce.
