Stocks in Free-fall as Coronavirus Fears Fester

The CDC warned the coronavirus threat in the U.S. was imminent

Patrick Martin
Feb 25, 2020 at 4:33 PM
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The Dow's disastrous free-fall continued today with its fourth-straight triple-digit loss, after the Center for Disease Control (CDC) warned that the spread of the coronavirus outbreak from Europe to the U.S. could be imminent. The blue-chip index -- which pivoted lower at midday after a brief foray into the black this morning -- has now racked up a deficit of over 1,900 points in the last two days.

The S&P 500 and Nasdaq were also shelled today, and while Fed Vice Chair Richard Clarida noted it was too soon to assess the extent of the virus' threat, he remarked that the Fed will "respond accordingly." Amidst this broad-market selloff, Wall Street's "fear gauge," the Cboe Volatility Index (VIX), continues to soar, briefly crossing the 30 level for the first time since December 2018.

Continue reading for more on today's market, including:

  • Job cuts draw Expedia options bears.
  • A potential coronavirus vaccine could be on the way.
  • Plus, Home Depot's earnings win; a bullish case for DaVita stock; and GE's latest annual report. 

The Dow Jones Industrial Average (DJI - 27,081.36) finished 879.4 points, or 3.2% lower for the day. McDonald's (MCD) was the best of the 30 blue-chips in the red, shedding 0.7%, while American Express (AXP) was the worst-performing, losing 5.7%.

The S&P 500 Index (SPX - 3,128.21) shed 97.7 points, or 3%, while the Nasdaq Composite (IXIC - 8,965.61) lost 255.7 points, or 2.8%.

The Cboe Volatility Index (VIX - 27.85) gained 2.8 points, or 11.3%, and touched an intraday peak of 30.25. 

closing indexes summary feb 25

nyse and nasdaq stats feb 25

5 Items on Our Radar Today

  1. Jefferies downgraded Tesla stock to “hold” today, citing the need for more visibility into the company’s potential profit as one of the main reasons for the change. While the analysts’ price target was raised, their rating of the stock was lowered despite gaining more than 60% over the last six weeks. (MarketWatch)
  2. The Federal Reserve and the markets are at odds when it comes to interest rate expectations, and it looks unlikely they’ll be agreeing anytime soon. Markets expect short-term rates to be cut at least once and possibly three times this year, while the Fed remains adamant about keeping rates steady. (CNBC)
  3. Home Depot earnings came in above analyst predictions.
  4. DaVita stock could be a good look for bulls.
  5. General Electric gave an encouraging annual report.

corporate earnings feb 25

unusual options activity feb 25

Data courtesy of Trade-Alert

Oil Drops; Gold Snaps Winning Streak

Oil futures fell today as the spreading COVID-19 outside of China continues to weigh on the global energy demand. April-dated crude fell $1.53 cents or 3%, to end at $49.90 per barrel.

Gold prices ended lower today, ending its haven-inspired eight-day streak. Gold for April delivery lost $26.60, or 1.69%, to settle at $1,650 an ounce. 



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