Stocks Post Worst Day of Year as Spreading Coronavirus Makes Wall Street Jittery

Stocks finish sharply lower Monday as investors weigh both the human and economic costs of the accelerating spread of the deadly coronavirus, which has killed 82 people and expanded to at least 10 different countries.
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  1. Stocks finished sharply lower sharply as investors weighed both the human and economic costs of the accelerating spread of the deadly coronavirus.
  2. The deadly coronavirus has killed 82 people and expanded to at least 10 different countries.
  3. AbbVie is Real Money's Stock of the Day. The company said China was testing an HIV drug, Aluvia, as a treatment for symptoms of the coronavirus.

U.S. stocks finished sharply lower Monday and global markets tumbled as investors weighed both the human and economic costs of the accelerating spread of the deadly coronavirus, which has killed 82 people and expanded to at least 10 different countries.

Five cases of coronavirus have been confirmed in the United States. The Centers for Disease Control and Prevention released data Monday showing 110 patients are now under investigation for possible coronarvirus infection in 26 states. 

The U.S. State Department raised its advisory for China to Level 3: Reconsider Travel due to the virus.

"Reconsider travel to China due to novel coronavirus first identified in Wuhan, China. Some areas have increased risk," said in an alert.

China's National Health Commission has confirmed about 2,900 cases of the deadly disease and cautioned that its incubation period could be as long as 14 days, creating a new challenge for authorities around the world attempting to screen visitors from China who might be carrying the virus.

Beijing said it will extend its Lunar New Year period until Feb 2, with schools and businesses in some cities expected to open a few days after that in an effort to contain the spread, while Hong Kong has banned inward travel for residents of Huebi Provence, where the outbreak began in the central industrial city of Wuhan.

The knock-on effect for both China's economy, as well as trade with is regional partners, has hit stocks hard and triggered a rally in safe-haven assets around the world heading into the busiest earnings week of the fourth-quarter earnings season.

Reports are expected this week from Apple  (AAPL) - Get Report, Advanced Micro Devices  (AMD) - Get Report, Pfizer  (PFE) - Get Report, Facebook  (FB) - Get Report, McDonald's  (MCD) - Get Report, Microsoft  (MSFT) - Get Report, Boeing  (BA) - Get Report, Amazon.com  (AMZN) - Get Report, Caterpillar  (CAT) - Get Report, Exxon Mobil  (XOM) - Get Report and Tesla  (TSLA) - Get Report.

Apple, Facebook, Microsoft, Amazon and Starbucks are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

The Dow Jones Industrial Average, which saw its worst day since October, finished down 454 points, or 1.6%, to 28,535 - at its low for the session the blue-chip index was down 549 points. The S&P 500 declined 1.6% and the Nasdaq was down 1.89%. The energy and tech sectors were the worst performers during trading Monday.

American Airlines (AAL) - Get Report was the Nasdaq's biggest loser, while Wynn Resorts (WYNN) - Get Report was leading the S&P 500's decline, as travel and casino stocks were pummeled over fears about the spread of the virus.

Intel (Intel) was the Dow's worst performer.

Most Asian markets were closed for the Lunar New Year holiday but Japan's Nikkei fell more than 2% Monday and European markets were down sharply.

"Markets hate uncertainty, and the coronavirus is the ultimate uncertainty in that no one knows how badly it will impact the global economy," said Alec Young, FTSE Russell's managing director of global markets research. "China is the biggest driver of global growth so this couldn’t have started in a worse place. Travel in China is much more ubiquitous than it was during the SARS outbreak in 2003, making comparisons less useful. And with the markets overbought to begin with, this is now a sell first, ask questions later situation.“

D.R. Horton  (DHI) - Get Report posted stronger-than-expected fiscal first-quarter earnings and boosted its 2020 sales forecast as low mortgage rates and surging activity continue to support the U.S. housing market.

Sprint  (S) - Get Report posted a narrower-than-expected fiscal third-quarter loss and said it was continuing to work with state attorneys general in advance of is $26 billion merger with T-Mobile U.S.  (TMUS) - Get Report.

AbbVie ABBV is Real Money's Stock of the Day. The company said China was testing an HIV drug, Aluvia, as a treatment for symptoms of the coronavirus.

Meanwhile, Allergan  (AGN) - Get Report has entered deals to sell two medications, Brazikumab and Zenpep, to help placate regulators as part of the company's $63 billion agreement to be acquired by AbbVie.

AbbVie 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.