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US STOCKS-Wall St rally pauses amid China virus outbreak, growth fears

Published 21/01/2020, 16:42
© Reuters.  US STOCKS-Wall St rally pauses amid China virus outbreak, growth fears
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* Airlines, travel stocks hit by China virus fears

* Morgan Stanley drops after Citi downgrade

* Halliburton up after profit beats estimates

* Indexes down: Dow 0.15%, S&P 0.23%, Nasdaq 0.09%

(Updates to open)

By Sruthi Shankar

Jan 21 (Reuters) - U.S. stock indexes slipped on Tuesday as

worries about the fallout from a deadly virus outbreak in China

and a gloomy growth outlook from the IMF paused a record-setting

rally on Wall Street.

The developments soured the mood for U.S. investors

returning from a long holiday weekend. Strong data, the signing

of the Phase 1 U.S.-China trade deal and an upbeat start to

fourth-quarter earnings season had sent the main indexes to

fresh highs on Friday.

Chinese officials on Tuesday confirmed the new coronavirus

outbreak took six lives and that it could spread between humans,

stoking fears of a global pandemic and reviving memories of

Severe Acute Respiratory Syndrome (SARS) — another coronavirus

outbreak that killed nearly 800 people in 2002-03. With the virus spreading just ahead of the Chinese New Year

holidays, travel stocks including Delta Air Lines Inc DAL.N ,

United Airlines Holdings Inc UAL.O and American Airlines Group

Inc AAL.O fell between 1.5% and 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 about 5%.

Booking.com owner Booking Holdings BKNG.O and Tripadvisor

TRIP.O both fell more than 2%.

"(The virus outbreak in China) seems to be the biggest

negative," said Scott Brown, chief economist at Raymond James in

St. Petersburg, Florida.

"But it's more of a global sentiment. We may see U.S.

markets try to spit it out because it doesn't have that much of

an impact on U.S. economy."

At 10:09 a.m. ET, the Dow Jones Industrial Average .DJI

was down 0.15% at 29,302.69. The S&P 500 .SPX fell 0.23% to

3,322.12 and the Nasdaq Composite .IXIC slipped 0.09% to

9,380.87.

Another cause for concern was the International Monetary

Fund trimming its global growth forecasts for 2020 and 2021. IMF

Managing Director Kristalina Georgieva said on Monday that while

a slowdown in global growth appeared to have bottomed out, there

was no rebound in sight. Halliburton Co HAL.N rose 2.2% after the oilfield service

provider beat Wall Street estimates for quarterly adjusted

earnings. Morgan Stanley MS.N slid 2.8% after Citigroup downgraded

the stock to "neutral", saying the shares were fairly valued.

Declining issues outnumbered advancers for a 1.72-to-1 ratio

on the NYSE and a 1.37-to-1 ratio on the Nasdaq.

The S&P index recorded 66 new 52-week highs and no new lows,

while the Nasdaq recorded 86 new highs and 15 new lows.

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