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* Facebook slides on warning of slowing revenue growth
* Tesla jumps after posting second straight quarterly profit
* Defensive sectors among gainers
* Indexes down: Dow 0.57%, S&P 0.70%, Nasdaq 0.77%
(Updates to early afternoon)
By Sruthi Shankar
Jan 30 (Reuters) - U.S. stocks dropped on Thursday as the
coronavirus epidemic raised fears of a further hit to China's
economy, with weak earnings from Facebook and others adding to
the gloom.
Shares of the social media giant FB.O dropped 6.5% after
the company warned of slowing growth as its business matured and
reported a surge in quarterly expenses. The S&P communication services index .SPLRCL fell 1.7%,
the most among the 11 major S&P subsectors. Defensive sectors
such as utilities and consumer staples, considered safer in
times of economic uncertainties, posted slight gains.
The main U.S. stock indexes are on course for their second
weekly declines as the outbreak has disrupted global travel and
forced several companies to suspend operations in China.
The World Health Organization's Emergency Committee is due
to reconvene on Thursday to decide whether to declare the virus,
which has killed 170 in China and infected 8,100 people
worldwide, a global emergency. "It will have a material impact on GDP in China, but how
much that resonates on a day-to-day basis, I don't know. We
really don't know how long this will last," said Eric Marshall,
portfolio manager with Hodges Funds in Dallas.
"Investors are taking a chance to make a quick check on
valuation and it has reset sentiment. It's not as bullish as a
couple of weeks ago."
At 1:00 p.m. ET, the Dow Jones Industrial Average .DJI
fell 0.57% to 28,569.95.
The S&P 500 .SPX dropped 0.70% to 3,250.41 and the Nasdaq
Composite .IXIC was down 0.77% at 9,203.77.
Earnings expectations for S&P 500 companies have been
improving steadily, with analysts forecasting a 0.7% rise in
fourth-quarter profit, compared with a 0.6% decline estimated at
the start of the season, according to Refinitiv data.
Microsoft Corp MSFT.O gained 2% after it beat expectations
for quarterly earnings, driven by Azure cloud computing revenue
growth. Tesla Inc TSLA.O jumped 11% after the maker of electric
cars posted a second straight quarterly profit as vehicle
deliveries hit a record. Altria Inc MO.N slid 5.4% after the tobacco company said
it took another $4 billion charge on its investment in Juul Labs
Inc. Package delivery firm United Parcel Service Inc UPS.N
dropped 5.6% after it forecast full-year earnings below
estimates.
Declining issues outnumbered advancers for a 2.28-to-1 ratio
on the NYSE and a 2.76-to-1 ratio on the Nasdaq.
The S&P index recorded 36 new 52-week highs and 14 new lows,
while the Nasdaq recorded 40 new highs and 85 new lows.