NEW YORK (Reuters) - U.S. stock indexes fell more than 1% on Thursday, with technology stocks among the hardest hit as investors weighed how bad the economic damage will be from the coronavirus outbreak as the number of cases rise outside of China.
Some attributed the fall to a report from the Global Times about infection levels at a Beijing hospital.
LOU BRIEN, MARKET STRATEGIST, DRW TRADING IN CHICAGO:
"There was a report of 36 cases in a Beijing hospital for coronavirus. If that can move the S&P 50 points in an hour, then I would think we're in a lot of trouble with the coronavirus and the stock market. The stock market was at a new all-time high yesterday and there were more than 2,00 deaths and 75,000 people infected. I think what's happening is that we had a very rapid move in stocks and it could be that one strategy bumped into another and all of a sudden someone had to liquidate."
KEITH BLISS, SENIOR VICE-PRESIDENT AT CUTTONE & CO IN NEW YORK:
"There is a Global Times story [that] this coronavirus is now spreading in hospitals in Beijing. The story suggests that the virus has spread to medical workers and people who help clean hospitals so the markets are shook up by that."
RANDY FREDERICK, VICE PRESIDENT OF TRADING AND DERIVATIVES FOR CHARLES SCHWAB IN AUSTIN, TEXAS:
"There was a quick deceleration there for about 30 minutes, but we're also getting a bit of a bounce back, and that makes me lean towards some sort of a program trade or algo because of how quickly it's bouncing back."
JUSTIN LEDERER, TREASURY ANALYSTS AND TRADER, CANTOR FITZGERALD, NEW YORK
“It’s a pure risk-off trade. You’ve seen the airlines hit – the fears of the potential economic impacts (of the coronavirus) are hitting. Beyond that, you’re hitting levels – yesterday it was the yen, today we’re approaching 1.50% on 10-years, it just feels like it’s a risk-off trade and it has potential for some legs. Beyond that, it’s definitely the most volatile trading I’ve seen in a bit.”
OLIVER PURSCHE, VICE CHAIRMAN AND CHIEF MARKET STRATEGIST AT BRUDERMAN ASSET MANAGEMENT IN NEW YORK
"It's emblematic of overall nervousness of the market. There's nervousness about earnings, and Apple spooked the market. People are still digesting the impact of the coronavirus on the supply chain, and, in particular, it's been a handful of stocks that have driven the returns and several of those are significantly impacted by the coronavirus, in particular the tech companies."
KEN POLCARI, senior market strategist at SlateStone Wealth LLC in Jupiter, Florida
"I haven’t seen anything other than what the headlines have been all morning - that now they are worried about coronavirus again. In my opinion, what is happening is the market got well ahead of itself, the coronavirus thing is not over by any stretch."
Look, the other day Apple came out and warned about missing and they can’t even quantify it yet. It doesn’t mean it is demand destruction, it just means the quarter is going to be hurt and they can’t define what it is yet. The airlines are starting to say they can’t define what it is yet. All these companies are now starting to come out and say they are going to take a hit but they don’t know what it is going to be yet."
"It’s all happening electronically, it just happens through the algos. Once these smart algos read the headlines and they see something negative, they just shift into sell mode. At the same time, the buyside liquidity cancels and moves lower and leaves a void in prices."
(Reporting by markets team)