Wall Street took a bit of a dip at the end of last week as investors mounted quite a broad sell-off of equities as growing concerns over the coronavirus outbreak capped the S&P 500’s worst full week in the last six months.
Actually, all three of the major US stock index averages took sharp negative turns. Both the Standard and Poors 500 and the Dow wrapped their worst weeks since August, with Nasdaq ending a six-week streak of wins. Singularly, the S&P 500 had its biggest single-day drop in more than three months, hardened by the US Centers for Disease Control and Prevention’s confirmation of the second case of the virus in the United States.
Overall, market participants have been extremely cautious of the coronavirus. After all, the World Health Organization has recently declared it definitely “an emergency in China,” since it has already claimed 26 lives with at least 800 known infections.
David Carter, Lenox Wealth Advisors chief investment officer in New York, comments, “Markets hate uncertainty and the virus has been enough to inject uncertainty into the markets.”
On the other hand, some analysts suspect investors are just looking for a reason to take their money out of the system. For example, CFRA Research (New York) chief investment strategist Sam Stovall suggests, “The virus is really more an excuse to take profits right now.”
And Kingsview Asset Management (Chicago) portfolio manager Paul Nolte agrees. He adds, “The markets are expensive and were looking for a reason to go down, and [the virus] is the excuse to do it.”
All of this boils down to the Dow Jones Industrial Average closing down 170 points—equivalent to 0.6 percent—to log its worst day since the top of the year. It could have been worse, actually, but the index shored up in the afternoon with a turnaround of Boeing stock, which closed up 1.7 percent. This came as the result of the Federal Aviation Administration commenting that Boeing’s previously struggling 737 Max jet will finally regain regulatory approval just in time for the summer travel season.