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* E*Trade jumps after news of Morgan Stanley deal
* ViacomCBS slumps after earnings disappointment
* Indexes down: Dow 0.4%, S&P 0.4%, Nasdaq 0.7%
(Updates to close)
By Caroline Valetkevitch
NEW YORK, Feb 20 (Reuters) - U.S. stocks fell on Thursday,
led by declines in technology heavyweights, after reports of new
coronavirus cases in China and other countries intensified fears
over its spread and impact on the global economy.
Investors were unnerved by a sharp late-morning drop that
took the S&P 500 briefly down more than 1% on the day, with some
traders attributing the move to a Global Times report that a
central Beijing hospital had reported 36 new cases. This raised
worries about a potential increase in infections in the Chinese
capital. Investors were already skittish after Japan reported two new
deaths and South Korea reported a rise in new infections.
Research suggested the virus was spreading more quickly than
previously thought. "The overlying question is the uncertainty over the
coronavirus and whether it's going to spread further and impact
global economic activity before things stabilize and ultimately
get better," said Michael Sheldon, executive director and CIO at
RDM Financial Group at Hightower in Westport, Connecticut.
He said it appeared investors were taking profits in some
high-flying technology names and buying shares of other groups,
including small caps. The Russell 2000 index .RUT ended up
0.2% on the day.
The S&P 500 technology index .SPLRCT lost 1% on the day.
The index has led gains in the S&P 500 so far this year and is
still up more than 10% since Dec. 31. Shares of Microsoft Corp
MSFT.O , Apple Inc AAPL.O and Amazon.com Inc AMZN.O fell
and were among the biggest drag on the S&P 500 on Thursday.
The Dow Jones Industrial Average .DJI fell 128.05 points,
or 0.44%, to 29,219.98, the S&P 500 .SPX lost 12.92 points, or
0.38%, to 3,373.23 and the Nasdaq Composite .IXIC dropped
66.22 points, or 0.67%, to 9,750.97.
Recent policy easing by China, a largely
better-than-expected fourth-quarter earnings season and hopes
that the economic jolt from the coronavirus will be short-lived
have pushed Wall Street's main indexes to new highs in recent
weeks. "In my opinion, what is happening is the market got well
ahead of itself. The coronavirus thing is not over by any
stretch," said Ken Polcari, senior market strategist at
SlateStone Wealth LLC in Jupiter, Florida.
E*Trade ETFC.O jumped 21.8% after Morgan Stanley MS.N
offered to buy it in a $13 billion stock deal, the biggest
acquisition by a Wall Street bank since the financial crisis.
In other corporate news, ViacomCBS Inc VIAC.O slumped
17.9% as its earnings fell short of revenue and profit
expectations in its first quarterly earnings results since
closing its merger. The S&P 500 posted 45 new 52-week highs and 4 new lows; the
Nasdaq Composite recorded 138 new highs and 56 new lows.
Volume on U.S. exchanges was 8.36 billion shares, compared
with the 7.63 billion average for the full session over the last
20 trading days.