Thursday's Stock Market Open: US Equities Fall As China Reports Surge In Virus Cases

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KEY POINTS

  • Virus cases in China are now at almost 60,000
  • Savid Javid resigned as UK Chancellor of the Exchequer
  • Inflation in the U.S. remained mild in January

U.S. stocks opened lower on Thursday as Chinese health officials reported a sudden spike in confirmed coronavirus cases.

The Dow Jones Industrial Average dropped 160.81 points to 29,390.61 while the S&P 500 fell 17.56 points to 3,361.89 and the Nasdaq Composite Index tumbled 68.9 points to 9,657.06.

China said that it confirmed 15,152 new cases and 254 additional deaths from the coronavirus – now called Covid-19 — after local health officials in Hubei province, the epicenter of the outbreak, used a new diagnosis methodology. China now has almost 60,000 confirmed cases, while 1,367 have died.

“Just when markets were getting comfortable with the idea that the Covid-19 infection increase was trending lower, the sudden jump in the number of new cases in Hubei has jolted them out of this sense of complacency,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd.

“With the upward revision to the number of those afflicted, the answer we should all give when asked about the full impact of this virus and when it goes away is ‘I don’t know,’” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

In a stunning development in the U.K., Sajid Javid resigned as Chancellor of the Exchequer as Prime Minister Boris Johnson reshuffled his cabinet.

In U.S. economic data, initial jobless claims inched up by 2,000 to 205,000 in the week ended Feb. 8, the government said Thursday.

The consumer price index edged up 0.1% in January, the smallest such gain in four months.

The core consumer price index, which ignores the volatile food and energy sector, climbed by 0.2% from the prior month, and 2.3% from a year ago.

Overnight in Asia, markets finished lower. China’s Shanghai Composite dropped 0.71%, while Hong Kong’s Hang Seng fell 0.34%, and Japan’s Nikkei-225 slipped 0.14%.

In Europe markets traded lower, as Britain’s FTSE-100 dropped 1.4%, France’s CAC-40 fell 0.57% and Germany’s DAX fell 0.33%.

Crude oil futures gained 0.57% at $51.46 per barrel and Brent crude gained 0.66% at $56.16. Gold futures rose 0.37%.

The euro slipped 0.15% at 1.0858 while the pound sterling gained 0.52% at 1.3027.