Dow plunges 500 points amid coronavirus fears after outbreak is declared a global health emergency and death toll reaches 213
by Reuters- Three main US stock indexes opened lower on Friday for the second day in a row
- Fears are growing that coronavirus outbreak could wreak economic havoc
- Positive earnings reports from Amazon and others were overshadowed by virus
Wall Street's main averages tumbled more than 1 percent on Friday, as mixed corporate earnings added to worries over the impact of the coronavirus outbreak on global growth.
The World Health Organization declared the epidemic a global emergency on Thursday after the fast-spreading virus killed more than 200 people in China and infected thousands globally.
Disruptions in supply chains and travel curbs are expected to weigh on China's economy, prompting economists to temper their growth expectations for the world's second-largest economy.
Although corporate earnings have been largely positive so far, Wall Street indexes are on course to end the week on a poor note as virus fears continue to grip financial markets.
At 11.36am, the Dow Jones Industrial Average was down 417.36 points, or 1.45 percent, at 28,442.08.
The S&P 500 fell 42.71 points, or 1.30 percent, at 3,240.95 and the Nasdaq Composite dropped 105.21 points, or 1.13 percent, at 9,193.72.
Amazon surged 11.5 percent in premarket trading after it trumped Wall Street estimates for holiday-quarter results, putting the online retailer back in the $1 trillion market capitalization club.
As the outbreak spreads in China, investors fear that it will drag on the world's second larges economy.
Fitch Solutions said it maintained its real GDP growth forecast for China at 5.9 percent for 2020, but said it could drop to 5.4 percent because of the virus.
'SARS experience suggests equities, especially in Asia, will keep falling until coronavirus infections stabilize and cyclical sectors are most vulnerable,' Citi's global equity strategist Robert Buckland wrote in a note.
Citi, however, asked investors to 'buy the dip'. 'Any further drop in global equities would make forecast returns more attractive,' Buckland wrote.
Refinitiv data showed fourth-quarter earnings of 193 companies on the S&P 500 index that have reported results through Thursday rose 0.7 percent, compared with a 0.6% decline estimated at the start of the season.
Among other stocks, Western Digital Corp jumped 5.1 percent after forecasting third-quarter earnings above Wall Street expectations, while International Business Machines Corp gained 4% after naming a new chief executive officer.
Caterpillar Inc, a bellwether for global economic activity, slipped 1 percent after it forecast full-year earnings below analysts' expectations.
Visa Inc fell 2.6 percent as it fell short of analysts' estimate for first-quarter revenue and warned revenue would be crimped by incentives it provide to banking clients in 2020.