Business

Dow futures tumble 500 points as coronavirus spreads

Posted January 26, 2020 7:38 p.m. EST
Updated January 27, 2020 9:31 a.m. EST

— US stock futures dropped sharply Monday as concerns grew over the spread of a deadly coronavirus.

Dow futures fell by as much as 500 points, or 1.6%. S&P 500 futures were down about 1.6% and Nasdaq futures were lower by about 2.1%.

Eighty people have been killed by the coronavirus, according to Chinese health officials. There are more than 2,700 confirmed cases.

The Centers for Disease Control and Prevention on Sunday confirmed a fifth case of the virus in the United States. Each of the infected people had recently traveled to Wuhan, China, the epicenter of the outbreak.

Four cases of the disease have been confirmed in Japan. The latest case is a man in his 40s who traveled from Wuhan and arrived in Japan on January 22.

"As the human cost continues to rise, investors have become increasingly concerned about the potential economic consequences of the disease," said analysts at Dutch bank Rabobank.

Investors piled into safe haven assets, such as gold, which gained 0.9% to trade near $1,585 an ounce.

Meanwhile, oil prices fell by more than 3%. Futures for Brent crude, the global benchmark, were trading at $58.73 per barrel. US oil futures were down at $52.41 per barrel.

Goldman Sachs analysts said last week that the anticipated decline in regional travel could bring down jet fuel prices, causing crude oil to take a hit.

Boeing's stock fell more than 2% in premarket trading after a passenger plane crashed in Afghanistan's eastern Deh Yak district of Ghazni province Monday. A government official cited "technical reasons" for the crash. Boeing is the heaviest-weighted Dow component and has outsize influence on the index.

In Tokyo, the Nikkei 225 ended with a loss of 2%. It was the only major stock market in east Asia open Monday due to the Lunar New Year. Major markets in Europe posted losses of roughly 2%, with luxury goods brands and travel stocks particularly hard hit.

Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, said that any moves today could be "exaggerated" because of the market closures in Asia. But he cautioned that the virus "will of course hang like a shadow over financial markets this week."

Halley also said that asset markets have been "pumped up" following the recent US-China trade deal and a slew of rate cuts by central banks last year. He said an unexpected shock to growth could leave markets "particularly vulnerable to a potentially strong downward correction."

The Dow closed down 0.6% on Friday — its worst day of the year. Also Friday, the S&P 500 had its worst day since early October, while the Nasdaq had its lowest close since early December.

-- CNN's Anneken Tappe, Faith Karimi, Ehsan Popalzai and Eliott C. McLaughlin contributed to this report.

Our commenting policy has changed. If you would like to comment, please share on social media using the icons below and comment there.