U.S. Stocks Fall Sharply Amid Growing Concerns About Coronavirus Outbreak

(RTTNews) - Stocks moved sharply lower during trading on Monday, extending the notable pullback seen over the course of the previous session. With the sell-off on the day, the major averages retreated further from their recent record highs.

The major averages showed a steep drop at the start of trading and remained firmly negative throughout the session. The Dow tumbled 453.93 points or 1.5 percent to 28,535.80, the Nasdaq plunged 175.60 points or 1.9 percent to 9,139.31 and the S&P 500 slumped 51.84 points or 1.6 percent to 3,243.63.

Growing concerns about the coronavirus outbreak in China contributed to the weakness on Wall Street amid worries about the impact on the global economy.

Chinese officials said the death toll from the new coronavirus has jumped to 81, with more than 2,800 people infected globally.

The continued spread of the coronavirus weighed on travel, tourism and hospitality stocks as well as companies with major exposure to China.

Some traders have likely taken the opportunity created by the outbreak to cash in on some of the recent record gains in the markets, potentially exacerbating the pullback.

On the U.S. economic front, the Commerce Department released a report unexpectedly showing a modest decrease in new home sales in the month of December.

The report said new home sales fell by 0.4 percent to an annual rate of 694,000 in December from a downwardly revised 697,000 in November.

The drop surprised economists, who had expected new home sales to surge up by 1.5 percent to an annual rate of 730,000 in December from the 719,000 originally reported for the previous month.

Revised data also showed new home sales slumped by 1.1 percent in November compared to the previously reported 1.3 percent jump.

Sector News

Most of the major sectors showed notable moves to the downside on the day, reflecting broad based weakness on Wall Street.

Oil service stocks turned in some of the market's worst performances, with the Philadelphia Oil Service Index plunging by 5.8 percent to a three-month closing low.

The sell-off by oil service stocks came amid a continued nosedive by the price of crude oil, as crude for March delivery tumbled $1.05 to $53.14 a barrel.

Substantial weakness was also visible among steel stocks, as reflected by the 4.3 percent slump by the NYSE Arca Steel Index. The index fell to its lowest closing level in over two months.

Semiconductor, computer hardware, natural gas and chemical stocks also saw significant weakness during the session.

Other Markets

In overseas trading, Japanese stocks fell sharply during trading on Monday, as most other markets in the Asia-Pacific region were closed for holidays. Japan's Nikkei 225 Index plunged by 2 percent.

The major European markets also showed significant moves to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 2.3 percent, the German DAX Index and the French CAC 40 Index both plummeted by 2.7 percent.

In the bond market, treasuries moved substantially higher due to their appeal as a safe haven. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 7.6 basis points to 1.605 percent.

Looking Ahead

Reports on durable goods orders and consumer confidence may attract some attention on Tuesday, although the data could be overshadowed by news about the coronavirus outbreak.

On the earnings front, F5 Networks (FFIV), Juniper Networks (JNPR), Sanmina (SANM) and Whirlpool (WHR) are among the companies releasing their quarterly results after the close of today's trading.

3M (MMM), Harley-Davidson (HOG), Pfizer (PFE), and Xerox (XRX) are also among the companies due to report their results before the start of trading on Tuesday.