Dow Falls 600 Points as U.S. Declares Coronavirus a Public Health Emergency

Stocks end sharply lower as the U.S. declares the deadly coronavirus a public health emergency.
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  1. Stocks finished sharply lower Friday as the U.S. declared the coronavirus outbreak a public health emergency and announced that people who pose a risk of transmitting the disease will temporarily be suspended from entering the U.S.
  2. Amazon.com is Real Money's Stock of the Day. Amazon's market cap surpassed $1 trillion after smashing fourth-quarter earnings and sales estimates.
  3. Caterpillar forecast 2020 profit below analysts' estimates amid what the machinery giant called "continued global economic uncertainty."

Stocks finished sharply lower Friday as the U.S. declared the coronavirus outbreak a public health emergency and announced mandatory quarantines for people returning from the Chinese province where the deadly disease originated.

The World Health Organization declared the coronavirus, which has killed 213 people and infected a further 10,000 others, to be a global health emergency. However, WHO Director-General Tedros Adhanom Ghebreyesus praised China's efforts to contain the spread of the virus and said the WHO "doesn't recommend - and actually opposes" travel and trade restrictions to China, the world's second-largest economy.

On Friday, the U.S. declared the coronavirus a public health emergency at a White House news conference.

Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, said during a White House briefing on the coronavirus that the risk to the American public is low.

The Trump Administration imposed a series of travel restrictions on people attempting to enter the U.S. from China.

"Any U.S. citizen returning to the U.S. who has been in Hubei province in the previous 14 days will be subject to up to 14 days of mandatory quarantine to ensure that they are provided with proper medical care and health screening,” said Secretary of Health and Human Services Alex Azar. 

“Any U.S. citizen returning to the U.S. who has been in the rest of mainland China within the previous 14 days will undergo proactive entry health screening at a select number of ports of entry and up to 14 days of monitored self-quarantine to ensure they’ve not contracted the virus and do not pose a public-health risk.

“Additionally, the president has signed a presidential proclamation, using his authority pursuant to Section 212F of the Immigration and Nationality Act, temporarily suspending the entry into the U.S. of foreign nationals who pose a risk of transmitting the 2019 novel coronavirus.” An exception will be made for immediate family of U.S. citizens and permanent residents, he said.

The restrictions go into effect Sunday at 5 p.m. ET.

Delta Air Lines  (DAL) - Get Report announced Friday that it will suspend all U.S. flights to China starting Feb. 6 through April 30 on concerns about the spread of the coronavirus. American Airlines  (AAL) - Get Report and United Airlines  (UAL) - Get Report also said they would be suspending flights.

The Dow Jones Industrial Average finished down 603 points, or 2.1%, to 28,256, the S&P 500 was down 1.77% and the Nasdaq declined 1.59%. Leading the Dow lower were Visa (V) - Get Report, Apple (AAPL) - Get Report, and Exxon Mobil  (XOM) - Get Report.

The Chicago Purchasing Managers Index, which measures manufacturing activity in the Midwest, dropped to 42.9 from 48.9 in December. It was the lowest level since December 2015.

Amazon finished up 7.38% to $2,008.72 Friday and for the third time on an intraday basis surpassed a market cap of $1 trillion after the online retailer and tech giant reported fourth-quarter earnings and sales that topped Wall Street estimates and costs for its one-day shipping program stabilized.

The company reported fourth-quarter earnings of $3.3 billion, or $6.47 a share, on a revenue jump of 21% to $87.4 billion as its next-day delivery shipping offers helped boost overall U.S. shipping volumes more than four times higher than last year. Costs linked to the one-day shipping plan came in under Amazon's $1.5 billion estimate, helping profit margins and efficiency.

Caterpillar  (CAT) - Get Report reported adjusted earnings in the fourth quarter of $2.63 a share vs. expectations of $2.37 but forecast 2020 profit below analysts' estimates amid what the machinery giant called "continued global economic uncertainty."

Exxon Mobil  (XOM) - Get Report posted weaker-than-expected fourth-quarter earnings as oil majors around the world see profits declining alongside global crude prices.

Exxon said adjusted earnings for the quarter were 41 cents a share, 2 cents below Wall Street forecasts. Revenue fell 6.6% to $67.17 billion but topped analysts' estimates of $64.1 billion.

Chevron swung to a large fourth-quarter loss though adjusted earnings of $1.49 a share for the three months ended in December beat expectations by 2 cents. Revenue fell 17.3% to $35 billion and was well below analysts' estimates of a $38.6 billion. 

International Business Machines  (IBM) - Get Report said CEO Ginni Rometty will step down in April and will be replaced by Arvind Krishna, head of the company’s cloud computing business.

Rometty has been CEO since January 2012.

Consumer spending in the U.S. in December rose 0.3%, matching economists' forecasts. The PCE inflation index, the Federal Reserve's preferred inflation gauge, rose 0.3%, the biggest increase since April 2019.