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Coronavirus update: Boeing warns on impact as Mobile World Congress gets cancelled

Anjalee Khemlani
·Senior Reporter
·4 min read

China’s domestic toll from the raging coronavirus outbreak continued to climb on Wednesday, as the crisis continued to threaten businesses and travel worldwide.

The death toll surpassed 1,100 Wednesday, and more than 45,000 cases have been reported globally, most of them contained to mainland China.

Still, the Mobile World Congress, an annual technology-focused conference that takes place in Barcelona, was canceled Wednesday. In recent days, several big names — including Intel (INTC), Google (GOOG), Sony (SNE) and Amazon (AMZN) — all backed out amid fears that the virus could spread further.

However, Alibaba (BABA) and JD.com are hiring warehouse workers amid the crisis, as restrictions in China have led to a surge in online shopping.

Other companies continue to watch and wait to see how long the outbreak lasts and affects China’s economy.The United States Parcel Service has suspended shipments to China and Hong Kong, as major airlines have suspended flights to the region.

The outbreak has also raised fears for the global economy overall, with Boeing (BA) on Wednesday saying the virus was becoming a drag on first quarter deliveries.

“The immediate and most significant economic impact is in China but will reverberate globally, given the importance of China in global growth as well as in global company revenue,” said Jessica Gladstone, an associate director at Moody’s, in a note Wednesday.

Most infections are contained to mainland China, but the global total is near 45,000
Most infections are contained to mainland China, but the global total is near 45,000

‘There is pressure’

As markets staged a comeback from virus fears that weighed against share prices last week, pharmaceutical companies continue to remain focused on a race to produce a vaccine or treatment for the virus. Some have coordinated with Chinese officials for limited experimental use.

Moody’s said in a note Wednesday that the virus could increase demand for health care companies, but some areas, such as generics, may feel the heat as many of the active ingredients used in them are produced in China and India.

“Given how quickly it is spreading, contagion to the pharmaceutical manufacturing hubs can't be ruled out,” Moody’s said — even though most facilities are far from the epicenter of the virus.

“And shortages of ingredients could cause the prices of certain drugs to rise rapidly as demand outstrips supply,” the firm added.

Meanwhile, the travel and leisure sector continues to feel the pressure from reduced operations in the region. Carnival Cruise on Wednesday noted a material impact from the virus is likely, on Wednesday.

“There is pressure,” CFRA Chief Investment Strategist Sam Stovall told Yahoo Finance, referring to stocks responding to the coronavirus.

“But the interesting thing is that we’ve been seeing 74% of the 125 subindustries in the S&P 500 Index show upward revisions to [fourth quarter] earnings.”

WHO urges solidarity

The World Health Organization completed a two-day forum to create a master plan to respond to the outbreak, with director general Tedros Adhanom Ghebreyesus warning the outbreak posed a “test of solidarity— political, financial and scientific.”

The WHO believes there will be a vaccine ready in as little as 18 months, after clinical trials, which could begin in three to four months, are complete.

The Diamond Princess, a cruise ship stuck in Japan, reported its third increase in cases, bringing the total to 174 of the 3,700 passengers. Some have been evacuated to a medical facility on land, and the quarantine is set to end next week.

Face masks continue to be in high demand, with supplies dwindling globally. Family and friends have taken to mailing face masks from nearby countries, and even from the U.S., to help alleviate the shortage.

The World Health Organization has sent testing kits and protective gear to several countries, largely in Africa, Asia and the Middle East.

Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem

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