Friday's Stock Market Open: US Equities Fall On Jump In Coronavirus Cases

Update: 12:05 p.m. EDT:

U.S. stocks widened losses by noon on Friday on reports of a spike in cases of coronavirus in China and South Korea. The Dow Jones Industrial Average fell 187.95 points to 29,032.03 while the S&P 500 dropped 26.93 points to 3,346.30 and the Nasdaq Composite Index slipped 116.37 points to 9,634.59.

In Europe markets finished lower, as Britain’s FTSE-100 fell 0.44%, France’s CAC-40 slashed 0.54% and Germany’s DAX dropped 0.62%.

Fed governor Lael Brainard said on Friday the central bank should establish temporary inflation targets above 2%, to compensate for periods when inflation is below target. “By committing to achieve inflation outcomes that average 2% over time, the committee would make clear in advance that it would accommodate rather than offset modest upward pressures to inflation in what could be described as a process of opportunistic reflation,” she said.

Brainard also said the Fed should act aggressively to mitigate future downturns. “The lessons from the crisis would argue for an approach that commits to maintain policy at the lower bound until full employment and target inflation are achieved,” Brainard said.

Atlanta Federal Reserve President Raphael Bostic told CNBC that he sees no need for further rate cuts. “My baseline expectations are that the economy is not going to see rising risks and it’s going to stay stable, so we won’t have to do anything [on rates],” he said.

Original story:

U.S. stocks opened lower on Friday on reports of a spike in cases of coronavirus in China and South Korea.

The Dow Jones Industrial Average fell 102.1 points to 29,117.97 while the S&P 500 dropped 13.19 points to 3,360.04 and the Nasdaq Composite Index slipped 39.28 points to 9,711.69.

China’s National Health Commission reported more than 800 new cases of coronavirus overnight for a total of 75,465, along with 2,236 deaths on the mainland. South Korea reported 52 new cases pushing up its total to 150.

Analysts worried about the ongoing economic fallout from the virus.

“Even if the outbreak recedes, global growth is still set to fall to zero in the first quarter, before bouncing back over the remainder of the year,” said Peter Berezin, chief global strategist at BCA Research. “Thus, a near-term hit to corporate earnings now looks unavoidable.”

The China Passenger Car Association reported that auto sales plunged by 92% in the first two weeks of February.

“It may be a much longer road,” said Dan Farley, chief investment officer of the investment solutions group at State Street Global Advisors. “We have to be very mindful that this [virus] is not an easily solvable issue and the impact on consumer demand for a number of different sectors is going to be something that we need to be watching out for.”

The International Air Transport Association predicted that global airlines will lose $29.3 billion of revenue this year due to the virus outbreak. Of that total airlines in the Asia Pacific region will lose $27.8 billion revenue.

Overnight in Asia, markets finished mixed. China’s Shanghai Composite gained 0.31%, while Hong Kong’s Hang Seng dropped 1.09%, and Japan’s Nikkei-225 fell 0.39%.

In Europe markets traded lower, as Britain’s FTSE-100 fell 0.2%, France’s CAC-40 fell 0.2% and Germany’s DAX edged down 0.04%.

Crude oil futures dropped 1.73% at $52.95 per barrel and Brent crude plunged 2.01% at $58.12. Gold futures rose 1.38%.

The euro rose 0.22% at $1.0809 while the pound sterling gained 0.43% at $1.2937.