US stocks plunged on Friday, ending a two-week
win streak, as the spread of the COVID-19 epidemic from China to neighboring countries fueled worries over a pronounced global economic slowdown. The spike in coronavirus cases dented market sentiment. The virus fears that seemed to have abated in recent weeks are back in full force. Friday’s losses sent the major US stock
averages lower on a weekly basis for the first time in three weeks. The S&P 500 index fell by 1.05% on Friday to close at 3,337.75, its biggest one-day percentage decline since Jan. 31. For the week, the S&P 500 lost 1.07%. Tech shares led losses in the index. Meanwhile, the Dow posted its first close below 29,000 since Feb. 4. and the worst daily performance since Feb. 7. The Dow Jones Industrial Averag dropped by 0.78%, to close at 28,992.41 on Friday. On a weekly basis, the Dow lost 1.5%. US stocks also came under pressure after IHS Markit said activity indicies for both US manufacturers and services firms declined in February for the first time in four years amid disruptions caused by the coronavirus and growing concerns over the outcome of the 2020 presidential election. Meantime, the Nasdaq Composite index lost 1.8% on Friday, to finish at 9,576.59, its worst single-day percentage fall since Jan. 27. For the week, the tech-heavy index shed by 1.6%. The uncertainty has been reflected in the market and has led to an increase in recession probabilities. Economists at Standard Chartered Bank estimated that COVID-19 epidemic could affect 30% of China’s imports and 10% of its exports, prompting them to lower their GDP forecast for China this year to 5.5% from 5.8%. Among stocks in the green, investors focused on 89bio Inc., a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. Despite losses, the biopharmaceutical company gained 8.41% for the week, closing at $33.66 on Friday. Rohan Palekar, the company’s Chief Executive Officer, will present at the SVB Leerink 9th Annual Global Healthcare Conference on Wednesday, February 26. Microsoft, meanwhile, was among the worst-performing US stocks, falling victim to coronavirus fears. The tech behemoth stock slid by 3.16% on Friday to end at 178.59. For the week, it lost 2.7%. According to analysts, the stock is showing signs of a more bearish phase. There’s the possibility of a larger correction.