(Updates to U.S. stock market close)
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Luxury and travel stocks drop
* CDC confirms first U.S. case of China coronavirus
* Yen, Treasuries gain on safe-haven move
By Rodrigo Campos
NEW YORK, Jan 21 (Reuters) - Risk assets took a hit across
the globe on Tuesday, while the Japanese yen and U.S. Treasury
prices gained, as financial markets reacted to mounting concern
about a new strain of flu-like virus out of China.
The World Health Organization called a meeting for Wednesday
to consider declaring a global health emergency while
authorities in China confirmed the coronavirus could spread
through human contact. The mayor of Wuhan, where the outbreak
began, confirmed a sixth virus-related death and the United
States reported its first case. Investors worried about the threat of contagion as hundreds
of millions travel for the Chinese Lunar New Year holidays,
which peak over the coming weekend. Traders recalled the fallout
from a Severe Acute Respiratory Syndrome (SARS) outbreak in
2002-2003 that killed about 800 people and which China initially
covered up.
Emerging market stocks lost 1.74%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.63%
lower, while Japan's Nikkei .N225 lost 0.91%. Hong Kong, where the economy suffered broadly due to the
SARS outbreak, saw its main stock index .HSI fall 2.8%, the
most for any day in over five months. The overnight chill in Asia carried over to European
markets. Shares of luxury goods makers - which have large
exposure to China - were among those declining the most.
A U.S. index of airline stocks fell 2.6%. Hotel and casino
operators Las Vegas Sands Corp LVS.N and Wynn Resorts Ltd
WYNN.O , both of which have large operations in China, dropped
over 5%. "The fear is this could mushroom into an epidemic that could
cut into economic activity," said Peter Cardillo, chief market
economist at Spartan Capital Securities in New York. "If it
turns into an epidemic, who's going to fly?"
The Dow Jones Industrial Average .DJI fell 152.06 points,
or 0.52 percent, to 29,196.04, the S&P 500 .SPX lost 8.83
points, or 0.27 percent, to 3,320.79 and the Nasdaq Composite
.IXIC dropped 18.14 points, or 0.19 percent, to 9,370.81.
The pan-European FTSEurofirst 300 index .FTEU3 lost 0.16
percent and MSCI's gauge of stocks across the globe
.MIWD00000PUS shed 0.45 percent.
In other markets, U.S. 10-year government bond yields
touched a two-week low while the safe-haven yen JPY=
strengthened 0.34 percent versus the dollar at 109.83.
"The fear is that it could be a SARS-type event, which was
an economic issue," said Ellis Phifer, market strategist at
Raymond James in Tennessee. "But this is all cautionary. The
market is not panicking or anything."
Benchmark 10-year notes US10YT=RR last rose 20/32 in price
to yield 1.7673 percent, from 1.835 percent late on Friday.
Monday was a U.S. market holiday.
The dollar index .DXY fell 0.01 percent, with the euro
EUR= down 0.07 percent to $1.1086.
Sterling GBP= was last trading at $1.3042, up 0.25 percent
on the day.
The Australian dollar AUD= dropped on the flu worries
since the country attracts large numbers of Chinese tourists,
who tend to be big spenders over the Lunar New Year holidays.
The dollar was last up 0.6% against the offshore yuan at
6.9073 per dollar CNH= .
Some investors were relieved that U.S. President Donald
Trump and French President Emmanuel Macron seemed to have struck
a truce over a proposed digital tax. They agreed to hold off on
a potential tariffs war until the end of the year, a French
diplomatic source said. A tariff war between China and the United States was blamed
for the global economic growth slowdown of last year.
U.S. gold futures GCc1 fell 0.16 percent to $1,556.30 an
ounce.
Oil prices fell on expectations that a well-supplied market
would be able to absorb disruptions that have cut Libya's crude
production to a trickle.
U.S. crude CLc1 fell 0.5 percent to $58.34 per barrel and
Brent LCOc1 was last at $64.51, down 1.06 percent on the day.