Yahoo Finance Stocks - Travel, Energy Stocks Pummeled as Virus Fears Hit Wall St.
By Geoffrey Smith
Investing.com -- U.S. stock markets fell to their lowest level in three weeks at the opening Monday before rebounding slightly, as growing fears about the impact of the coronavirus outbreak on the Chinese and the global economy sent a wave of risk-aversion rippling through the financial system.
By 10:25 AM ET (1525 GMT), the Dow Jones Industrial Average was down 410 points, or 1.4% at 28,581 points. The S&P 500 was down 48 points, also a drop of 1.4%, while the Nasdaq Composite was down 1.8%.
At the same time, yields on safe-haven Treasury bonds plummeted. The 10-Year benchmark yield fell seven basis points to 1.61%, its lowest since early October. It's now down 21 basis points in the last week. Gold futures also rallied.
Travel stocks were badly hit as markets participants priced in the risk of a hit to global tourism if the outbreak continues to spread. Booking (NASDAQ:BKNG) stock and Expedia (NASDAQ:EXPE) stock both fell over 3.5%, while American Airlines (NASDAQ:AAL) stock fell 6.9% to its lowest since October and United Airlines (NASDAQ:UAL) stock fell 5.3% to an 18-month low. Delta Air Lines (NYSE:DAL) stock fell 5.0%.
Over the weekend, the Chinese authorities had said that it estimated traffic by road, rail and air at the start of the week-long holiday seasons fell by 29% from a year earlier, due in part to a broadening clampdown on public transport aimed at containing the virus near its origins in central China.
The novel coronavirus has, however, been detected in almost all of China’s regions, and the head of the country’s health commission said at the weekend that patients can be infectious for up to 14 days before becoming symptomatic – a key difference with the SARS virus in 2003 that will allow the new bug to spread more widely.
Energy stocks were also hit hard as oil traders factored in a sharp drop in Chinese oil demand – in a market that both OPEC and the International Energy Agency had already said would be oversupplied in the first half of the year, even before the outbreak started. U.S. crude bounced from earlier lows to be down 1.7% at $53.28 a barrel.
Blue chips Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) both came under pressure, both falling 1.5%, but financially-constrained shale plays such as Laredo Petroleum (NYSE:LPI) and Oasis (NASDAQ:OAS) were worse hit, both touching new lows. Laredo is now down over 50% in the last three weeks. Oasis was down 3.3%.
Elsewhere, Walt Disney (NYSE:DIS) stock fell 2.2% to a two-month low, amid reports that both of its theme parks in Shanghai and Hong Kong will be closed for the entire Chinese holiday season. Alibaba (NYSE:BABA) ADRs meanwhile fell 4.4% on more generic fears for Chinese retail sales.
One rare bright spot was homebuilder DR Horton (NYSE:DHI), which rose 2.9% to a new all-time higher after posting stronger-than-expected earnings for the three months through December.
Elsewhere the dollar benefited from the wave of caution.The dollar index rose 0.1% to its highest since early December at 97.750.
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