U.S. Stocks Slump on Virus Fear; Treasuries Rally: Markets Wrap

 

 

 

• U.S. jobs increased at stronger-than-expected pace in January
• Corporate fallout from coronavirus is coming into focus

And these are the main moves in markets:

Stocks

• The S&P 500 Index decreased 0.6% as of 10:05 a.m. New York time.
• The Stoxx Europe 600 Index declined 0.6%.
• The MSCI AC Asia Pacific Index fell 0.6%.

Currencies

• The Bloomberg Dollar Spot Index gained 0.1%.
• The British pound rose 0.2% to $1.2953.
• The euro fell 0.1% to $1.0972.
• The Japanese yen strengthened 0.4% to 109.53 per dollar.

Bonds

• The yield on 10-year Treasuries fell seven basis points to 1.57%.
• Britain’s 10-year yield fell three basis points to 0.55%.
• Germany’s 10-year yield dipped three basis points to -0.4%.

Commodities

• West Texas Intermediate crude fell 1.3% to $50.29 a barrel.
• Gold rose 0.4% to $1,573.18 an ounce.
• Copper fell 1.6% to $2.5505 a pound.

U.S. equities slumped amid speculation the recent rally may have gone too far too fast and as concern about the economic impact of the coronavirus overshadowed data showing a strong American jobs market. Treasuries climbed and oil fell.

The S&P 500 Index snapped a four-day winning streak, while drops in miners and carmakers led the Stoxx Europe 600 Index lower. Yields on 10-year Treasuries fell below 1.6% after data showed U.S. employers hired at a faster-than-expected pace in January as wage gains rebounded. Luxury retailer Burberry Group Plc slipped after scrapping guidance over the virus hitting sales in China. Apple Inc.’s iPhone maker Foxconn told employees not to return to work at its Shenzhen facility when the extended Lunar New Year break ends Feb. 10.

Stocks got off to a roaring start this week as investors bet that the economic damage from the deadly respiratory virus that originated in China would be contained. But with fresh reports of further infections, more deaths and more quarantines, the fallout for companies is starting to come into focus, with corporations such as Toyota Motor Corp. and Honda Motor Co. temporarily halting operations in China.

“The market moved up so quickly over the last few days and I think papered over the continued risk associated with the coronavirus,” said Robin Anderson, senior global economist at Principal Global Investors. “There’s still a lot of unknowns out there.”

Australia’s dollar dropped to its lowest level in a decade with the fallout from the coronavirus hurting riskier assets. Equities pushed lower across most of Asia as news of further infections on a cruise ship off Japan offered another reminder that cases remain on the rise. Singapore boosted its disease response to the second-highest level, the same one for the SARS epidemic. Confirmed cases worldwide now total 31,432, having risen more than 3,000 in one day, while the death toll reached 638.

Meanwhile, the presidents of China and the U.S. reaffirmed their commitment to the implementation of a phase-one trade deal in a phone call Friday.