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Dow tumbles 600 points as coronavirus fears rock stocks

Jonathan Garber

U.S. equity markets tumbled Friday as the coronavirus continued to spread and corporate earnings rolled out.

Heavy selling pushed the Dow Jones Industrial Average lost 603 points, pushing it and the S&P 500 into the red for the year. The Nasdaq Composite held onto its 2 percent gain for 2020.

Volatility kicked higher, hitting a level of 18 and capping a 40 percent jump this month, it's largest monthly start to a year on record, according to the Dow Jones Market Data Group.

China’s National Health Commission has confirmed 9,692 cases and 213 deaths related to the virus. The World Health Organization declared the outbreak is a “global health emergency" earlier this week.

Late Friday, members of President Trump's coronavirus task force gave an update, also declaring the outbreak a health emergency for the U.S.

Drugmakers and medical mask makers continued to climb as the coronavirus expanded its reach while airlines and casino operators fell.

Looking at earnings, Amazon’s market capitalization reclaimed the $1 trillion level early in the session after the e-commerce giant reported earnings and revenue that were well ahead of expectations. However, the company's value fell back below the threshold as the market's selloff intensified late in the day.

Caterpillar reported fourth-quarter sales slumped 8.4 percent year over year and forecast its full-year 2020 profit below Wall Street estimates, citing weak user demand amid an uncertain global economic backdrop.

Visa’s first-quarter profit jumped 10 percent to a record $3.27 billion as the credit card company processed more than $3 trillion of transactions.

Oil giant Exxon Mobil’s fourth-quarter profit fell 5.2 percent to $5.69 billion amid weakness in its refining and chemicals unit. Production in the Permian Basin, the largest U.S. shale field, jumped 54 percent from last year. Meanwhile, rival Chevron reported a $6.6 billion loss as a result of writedowns related to North American shale assets.

IBM shares spiked after CEO Ginni Rometty announced she is retiring from the company after almost 40 years. Arvind Krishna, head of IBM’s cloud unit and a key architect of the company’s Red Hat acquisition, will be Rometty’s replacement.

West Texas Intermediate crude oil was down to $51.57a barrel and gold was up 0.2 percent to almost $1,592 an ounce.

U.S. Treasurys gained, pushing the yield on the 10-year note down 4.3 basis points to 1.507 percent, a four-month low.

In Europe, Britain’s FTSE tumbled 1.4 percent ahead of the United Kingdom’s exit from the European Union. Germany’s DAX and France’s were down 1.2 percent and 1.1 percent, respectively.

Asian markets were mixed, with Hong Kong’s Hang Seng sliding 0.5 percent and Japan’s Nikkei adding 1 percent. China’s Shanghai Composite remained closed in observance of the Lunar New Year.

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