US stocks sold off and the Nasdaq had its worst daily percentage decline in about three weeks on Friday as a spike in new coronavirus cases and data showing a stall in US business activity in February fueled investors’ fears about economic growth. Declines were led by the technology sector for a second straight session. Tech-related heavyweights Microsoft Corp, Amazon.com Inc and Apple Inc were the biggest drags on the S&P 500.
The S&P technology index dropped 2.3 per cent. Chipmakers, which have strong ties to China, also fell sharply. The Philadelphia Semiconductor index ended down 3 per cent. China reported a jump in new cases on Friday, while South Korea became the latest hot spot, with 100 new cases, and more than 80 people tested positive for the virus in Japan. Apple earlier this week issued a sales warning, citing the impact of the virus outbreak.
The worries pushed up Wall Street’s fear gauge, the CBOE volatility index , and caused investors to seek safe-haven assets. The VIX hit its highest closing level since 3 February. Gold and bond prices rose and some defensive equity sectors, including staples, ended the day higher. The IHS Markit Purchasing Managers’ index of services sector activity dropped to its lowest level since October 2013, signalling a contraction for the first time since 2016. The manufacturing sector also clocked its lowest reading since August.
The Dow Jones Industrial Average fell 227.57 points, or 0.78 per cent, to 28,992.41, the S&P 500 lost 35.48 points, or 1.05 per cent, to 3,337.75 and the Nasdaq Composite dropped 174.38 points, or 1.79 per cent, to 9576.59.Morning-Market-Note-Monday-24th-February