Stocks Drop a Fourth Day With Virus Anxiety Rising: Markets Wrap

(Bloomberg) — U.S. equities fell, putting the S&P 500 on pace for its biggest four-day slump since August, as investors weighed the latest coronavirus developments. Treasuries gained.

After opening positive, the benchmark index turned lower in the wake its largest loss in two years on Monday. Energy, material and financial shares led the declines. Ten-year Treasury yields resumed a push to record-low levels. European stocks extended losses, while bonds from the region were mixed. pushed lower again after Monday’s slide of nearly 4%.

“It’s the realization that the market was not going to bounce like it usually does after a severe one-day decline,” said Matt Maley, an equity strategist at Miller Tabak & Co. “Once that become obvious, the short-term traders started selling and the long-term investors pulled in their horns.”

Declines in banks and food producers dragged the index lower. Japanese shares tumbled more than 3% as traders returned after a holiday, though the decline was less than the two-session slide on Wall Street while they were away. Stocks fell in China and Australia and pushed higher in South Korea and Hong Kong. The yen strengthened against the dollar for a third day.

Erratic market moves suggest investors remain on edge over the economic impact of the virus. The World Health Organization has held off from declaring a global pandemic even as cases surged in South Korea, Italy and Japan. Some traders may be taking encouragement from news about the development of treatments, even if experts warn it would take time to build stocks of medicines. Fujifilm Holdings Corp. and Moderna Inc. are among companies experimenting with treatments or vaccines.

“The markets are pricing in the what ifs of the coronavirus, not necessarily exactly what is,” said Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co.

Analysts at Oxford Economics Ltd. said the epidemic could wipe more than $1 trillion from global domestic product, while the International Monetary Fund lowered its growth forecasts for the world economy.

Elsewhere, iron ore futures fell as steel inventories surged to a record in China and investors continued to weigh the impact of the coronavirus outbreak. Gold retreated from the highest level since 2013.

These are some key events coming up:

• Earnings keep rolling in from companies including: Peugeot SA (PA:) on Wednesday; Baidu Inc (NASDAQ:)., Best Buy Co (NYSE:). Inc., Occidental Petroleum Corp (NYSE:). and Dell Technologies Inc. on Thursday; and London Stock Exchange Group (LON:) Plc on Friday.
• The Democratic presidential debate in South Carolina is on Tuesday.
• The Bank of Korea announces its policy decision on Thursday, with rising risks of an interest-rate cut.
• U.S. jobless claims, GDP and durable goods data are out Thursday.
• Japan industrial production, jobs, and retail sales figures are due on Friday.

These are the main moves in markets:

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