Stocks Finish Down as Wall Street Assesses Coronavirus Impact

Stocks end lower as investors continue to monitor the coronavirus outbreak's impact on global growth and corporate profits.
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  1. Stocks tumbled Thursday, a day after the S&P 500 and Nasdaq set closing record highs.
  2. Coronavirus update: 2,130 deaths globally; 75,778 confirmed cases
  3. Morgan Stanley is Real Money's Stock of the Day after the investment bank reached an agreement to buy E*Trade Financial for $13 billion in stock.

Stocks finished down Thursday, a day after the S&P 500 and Nasdaq set closing record highs, as investors continued to monitor the coronavirus outbreak's impact on global growth and corporate profits.

The Dow Jones Industrial Average ended down 128 points, or 0.44%, to 29,220, the S&P 500 fell 0.38% and the Nasdaq was down 0.67%. The tech sector was the biggest decliner Thursday.

Leading the Dow lower were Intel  (INTC) - Get Report, Goldman Sachs (GS) - Get Report and Microsoft  (MSFT) - Get Report.

Goldman Sachs warned clients about a possible correction in equities as investors underestimate how much of an impact the virus may have on the stock market.

“We believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high,” Goldman strategist Peter Oppenheimer wrote in a note.

South Korea reported Thursday its first death from the coronavirus, and Japan confirmed two deaths from a quarantined cruise ship. Global deaths from the virus have risen to 2,130 and confirmed cases have increased to 75,775, according to Johns Hopkins CSSE.

"News of deaths in Japan and South Korea due to the virus are leading to concerns that the global supply chain will be impacted in a material way - t-his can be seen in the price action of the semiconductors companies," which were falling Thursday, said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

Also denting sentiment were comments from Federal Reserve Vice Chairman Richard Clarida, who told CNBC in an interview that he doesn’t think most market participants really expect an interest rate cut from the central bank.

"Market pricing for rate cuts is a little tricky, because there’s market expectations for rates, there also can be term and liquidity premiums,” Clarida said in the interview.

Morgan Stanley  (MS) - Get Report announced Thursday it was acquiring E*Trade Financial  (ETFC) - Get Report for $13 billion in stock.

Morgan Stanley's acquisition of E*Trade for $58.74 a share is one of the biggest Wall Street deals since the 2008 financial crisis.

The all-stock takeover combines one of Wall Street's oldest and most established firms with a modern-day discount broker that has arguably shaken and re-shaped the world of securities trading.

E*Trade shares finished up 21.81% to $54.73 in trading Thursday.

ViacomCBS  (VIACA) - Get Report posted a fiscal fourth-quarter loss of $258 million as costs associated with the recent re-marriage of Viacom and CBS failed to offset higher revenue from its content portfolio and streaming services offerings.

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

Six Flags  (SIX) - Get Report, the theme-park operator, missed Wall Street's fourth-quarter earnings expectations, slashed its dividend, and said its chief financial officer would retire. 

L Brands  (LB) - Get Report reached an agreement to sell Victoria’s Secret to private-equity firm Sycamore Partners in a deal that values the lingerie brand at about $1.1 billion.

Leslie Wexner, who has run the retail company for more than 50 years, will step down as CEO and chairman, but will remain on the L Brands board.