Stocks Crumble Amid Warnings About Spread of Coronavirus

Stocks end sharply down Tuesday as Wall Street's massive selloff continues for a second straight session.
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  1. Stocks ended down Tuesday as Wall Street's massive selloff continued for a second straight day. The 10-year and 30-year Treasury notes reached record low yields.
  2. Coronavirus update: 77,658 confirmed cases in China and 2,663 deaths. Globally, there are 80,238 cases, according to the World Health Organization, and 2,700 deaths.
  3. Home Depot is Real Money's Stock of the Day. The home-improvement retailer posted stronger-than-expected fourth-quarter earnings and reiterated its full-year earnings forecast.

Stocks finished sharply lower Tuesday as Wall Street's massive selloff continued for a second straight session amid fears the spreading coronavirus could tip the world economy into recession.

The 10-year and 30-year Treasury yields hit record lows.

"Current global circumstances suggest it’s likely this virus will cause a pandemic,” Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention said Tuesday at a news briefing, CNBC reported.

"It’s not so much a question of if this will happen any more, but rather more a question of when this will happen and how many people in this country will become infected and how many of those will develop severe or more complicated disease,” Schuchat said, according to CNBC.

Earlier in the day, the CDC's Dr. Nancy Messonnier told reporters on a conference call that “we are asking the American public to work with us to prepare in the expectation that this could be bad.”

While the rated of reported new cases in China has slowed, the disease has spread to South Korea, Italy and Iran in recent days.

“The data over the last week and the spread in other countries has certainly raised our level of concern and raised our level of expectation that we are going to have community spread here ... That’s why we are asking folks in every sector as well as within their families to start planning for this,” said Messonnier.

The Dow Jones Industrial Average finished down 879 points, or 3.15%, to 27,081, the S&P 500 was down 3.03% and the Nasdaq ended down 2.77%.

The Dow was down 3% for two straight days in a row.

Leading the Dow's decline were American Express (AXP) - Get Report, UnitedHealth (UNH) - Get Report, and Visa (V) - Get Report.

The Dow lost more than 1,000 points Monday as major stock indexes were slammed on worries that the global spread of the coronavirus will impact economies outside of China.

Flight-to-quality trades are being favored over risky investments as analysts cut forecasts for global growth and data show worrying declines in both manufacturing and service sector activity in major economies around the world.

The 10-year Treasury yield was 1.330%, after hitting an intraday low of 1.310%. The previous record low closing yield was 1.365%, set on July 8, 2016. The previous record low intraday yield was 1.325%, set on July 6, 2016.

The 30-Year US Treasury Yield was 1.803% after hitting an intraday low of 1.788%, both of which are record low yields for the 30-year Treasury. The previous record close f was 1.836% and the previous intraday low was 1.811%, both set Monday.

The market's principal concern - the spread of the coronavirus - also has yet to abate, with confirmed cases around the world topping 80,200 and the death toll rising to more than 2,700, most of which are centered around Wuhan, the Chinese city where the outbreak was first identified in late December.

In contrast with the CDC, the World Health Organization said the disease hasn't evolved into a global pandemic, despite cases being found on three continents.

After the close, Walt Disney (Disney) said that Robert Iger stepped down as chief executive and would be come executive chairman. The company named Bob Chapek CEO and said he would join the board later. Chapek has been chairman of Disney Parks, Experiences and Products. Shares closed Tuesday's session down 3.6% at $128.19

“With the successful launch of Disney’s direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Mr. Iger said. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”

Home Depot  (HD) - Get Report posted stronger-than-expected fourth-quarter earnings and reiterated its full-year earnings forecast as same-store sales topped forecasts for the period.

Home Depot said same-store sales rose 5.2% in the quarter, well ahead of analysts' estimates of 4.7%, and the home-improvement retailer reiterated its full-year 2020 guidance that sees comparable-store sales rising between 3.5% and 4.%. Full-year earnings are expected to rise 2% to $10.45 a share, the company said.

Home Depot is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells HD? Learn more now.

Fourth-quarter earnings at Macy's  (M) - Get Report were stronger than expected and the retailer repeated its full-year profit guidance, thanks in part to a "meaningful sales uptick" in the pre-Christmas period.

Mastercard  (MA) - Get Report on Tuesday named current Chief Product Officer Michael Miebach as its next CEO, replacing current CEO Ajay Banga, who will continue on as the company’s executive chairman effective next January. 

The announcement came a day after the credit card company warned on Monday that the effects of the coronavirus will result in slower revenue growth for the first quarter than the company guided for on its earnings call in late January.

Moderna (MRNA) - Get Report shares rose sharply Tuesday after the drugmaker shipped vials of a potential coronavirus vaccine to the National Institute of Allergy and Infectious Diseases in Bethesda, Md. for testing.

United Airlines  (UAL) - Get Report scrapped its 2020 earnings guidance amid what it called the  "heightened uncertainty" the carrier faces from the coronavirus outbreak.