The virus discovered in China is unsettling investors — but temporarily bolstered some pharmaceutical stocks, even as analysts downplay the sickness’ impact on the global economy.
Markets reacted negatively as the Wuhan, or Novel, coronavirus claimed continues to claim more than a dozen lives in China and infected hundreds of others — including the first confirmed U.S. case. Amid concerns about travel and global growth, travel and leisure shares dropped, but pharmaceutical stocks got a boost that appeared to fade on Wednesday.
Meanwhile, at least one analyst has called into question the market’s reaction.
“The threat to the U.S. is very very very small,” Chris Meekins, Raymond James vice president and a former Health and Human Services official in the Trump administration, told Yahoo Finance on Wednesday.
He said HHS and the Centers for Disease Control — which identified the first American patient on Tuesday — were “global leaders” in fighting infectious diseases. Meekins also said there was uncertainty behind “how it spreads and why it spreads,” which makes contagion fears premature at best.
“So there are normal things you can do...but from a U.S. perspective, we haven’t seen a spread within the [country] yet,” Meekins told “On the Move.”
Pandemic? Not yet
The virus has already claimed 17 lives and infected more than 400 in China, Thailand, Japan and Korea, during the busiest travel season for the Lunar New Year. The World Health Organization called for an emergency meeting Wednesday to consider if the outbreak rose to the level of an international public concern.
Chinese officials announced the first travel ban Wednesday, placing a restriction on movement out of Wuhan city, where the virus originated.
The shares of smaller pharmaceutical companies enjoyed a brief boost Tuesday — mainly because they have late stage treatments in the pipeline that address similar airborne viruses or the flu.
Inovio (INO), which is working to combat another coronavirus, the Middle Eastern respiratory syndrome, also saw its stocks rise.
However, Meekins was skeptical about the need for those companies’ products, given that outbreak is contained for now.
“Unless you get a supplemental government funding bill..it’s unlikely you’re going to see a major government investment into these companies,” Meekins told Yahoo Finance.
“And with the virus only being confirmed in less than 500 cases, I don’t exactly see a market for these products yet, and hopefully there never will be.”
The jitters over the coronavirus stem from the early 2000s, when China was widely criticized for its lack of transparency as the SARS outbreak spread.
Mary Rogers, principal scientist and head of Abbott’s (ABT) Global Viral Surveillance Program, said lessons have been learned since then.
“We are already moving much faster...that alone means hopefully we will be able to curb it at a faster pace,” she told Yahoo Finance Tuesday.
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem