U.S. benchmark stock indexes finished lower on Tuesday, pulling back from records seen last week, after news that the Chinese coronavirus had spread to the U.S. raising fears of a pandemic that might affect global economic growth.
How are benchmarks faring?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.40% shed 152.06 points, or 0.52%, to 29,196.04, ending its five-day streak of gains. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.47% fell 8.83 points, or 0.27%, to 3,320.79 and the Nasdaq Composite index /zigman2/quotes/210598365/realtime COMP +0.87% closed down 18.14 points, or 0.19%, to 9,370.81, after briefly turning positive mid-session to set a record intraday high of 9,397.58.
U.S. markets were closed Monday in observance of Martin King Luther Jr. Day.
Last week, the Dow, S&P 500 and Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.87% all posted their best weekly gains since Aug. 30, according to FactSet data.
/zigman2/quotes/210598065/realtime DJIA +0.40% The Dow has risen for five of the past six weeks, with a year-to-date return of 2.3%. The S&P 500 has gained for two consecutive weeks, with a year-to-date return of 2.8% and the Nasdaq has risen for six straight weeks, with a year-to-date return of 4.4%.
What’s driving the market?
The risk-off mood in Asian equities spilled over onto Wall Street after the U.S. Centers for Disease Control and Prevention announced the first case of the coronavirus within the U.S. The virus’s outbreak in China, which originated in the city of Wuhan, has sickened around 300 people, leaving six dead, according to Chinese state media and health officials.
The World Health Organization was said to be considering declaring an international public health emergency over the virus, as it did with swine flu and Ebola.
“The spreading of the virus in China was part of a number of issues contributing to futures trading lower, but the intraday downturn we see now is more related to reports that [the coronavirus] could be a domestic issue. When you have a market close to all-time highs, it’s vulnerable to any bad news,” Randy Frederick, managing director of Trading & Derivatives at Schwab Center for Financial Research, told MarketWatch.
At the same time, he said such shocks tend to prove short-lived, especially, in a bull market that has seen records across major equity benchmarks in week after week.
Softness in markets Tuesday is being driven “by a combination of fears related to the virus and investor fatigue,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company. “It provides an opportunity for some people to take some profits.”