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US STOCKS-Wall Street skids as virus fears hit tech, travel stocks

Published 27/01/2020, 18:24
© Reuters.  US STOCKS-Wall Street skids as virus fears hit tech, travel stocks
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(For a live blog on the U.S. stock market, click LIVE/ or type

LIVE/ in a news window.)

* Airlines, casino stocks hit by extended China holidays

* Banks follow U.S. Treasury yields lower

* Crude slips below $60, energy shares down

* Indexes down: Dow 1.38%, S&P 1.36%, Nasdaq 1.69%

(Changes comment, updates prices)

By Sruthi Shankar

Jan 27 (Reuters) - Wall Street's main indexes fell more than

1% on Monday as investors worried about the economic fallout of

a virus outbreak in China that has prompted the country to

extend the Lunar New Year holidays and businesses to close some

operations.

The benchmark S&P 500 was jolted off record highs last week

as China locked down several cities and curbed travel, reminding

investors of the deadly SARS virus that killed nearly 800 people

in 2002-03 and cost the global economy billions.

Travel-related stocks, including airlines, casinos and

hotels, were the worst-hit on Wall Street, while shares of tech

heavyweights that enjoyed a strong rally recently dragged

markets lower.

"There's been an overabundance of bullishness ... The market

is overdue for a correction," said Randy Frederick, vice

president of trading and derivatives at Charles Schwab in

Austin, Texas.

"If you've made a pretty good profit since October, it's

probably not a bad move at all to sell."

At 11:58 a.m. ET, the Dow Jones Industrial Average .DJI

slipped 1.38% to 28,589.26. The S&P 500 .SPX fell 1.36% to

3,250.50 and the Nasdaq Composite .IXIC dropped 1.69% to

9,157.36.

Apple Inc AAPL.O , Microsoft Corp MSFT.O , Alphabet Inc

GOOGL.O and Amazon.com Inc AMZN.O dropped between 1.6% and

Wynn Resorts Ltd WYNN.O , Melco Resorts & Entertainment Ltd

MLCO.O and Las Vegas Sands Corp LVS.N , which have large

operations in China, slid between 3.7% and 6.9%. The NYSE Arca

Airline index .XAL dropped 3.0%.

The iShares China Large-Cap ETF shed FXI.P 4.3%.

Yum China Holdings Inc YUMC.N slid 4.4% after the company

said it had temporarily closed some of its KFC and Pizza Hut

stores in Wuhan. The death toll from the outbreak in China rose to 81 on

Monday and a small number of cases linked to people who

travelled from Wuhan have been confirmed in more than 10

countries, including Thailand, France, Japan and the United

States. Wall Street's fear gauge, the CBOE Volatility index .VIX

jumped to its highest since Oct. 10.

The rush to safe haven assets sank U.S. Treasury yields to

three-month lows, putting pressure on lenders. The S&P 500 banks

index .SPXBK was down 1.4%. US/

The S&P energy index .SPNY dropped 2.5% as crude price

fell below $60 per barrel on fears of slowing oil demand

following the outbreak. O/R

Defensive sectors such as consumer staples .SPLRCS edged

up, while real estate .SPLRCR and utilities .SPLRCU posted

minimal losses.

Fourth-quarter earnings season will kick into high gear this

week with 141 of the S&P 500 companies expected to report this

week including Apple, Microsoft Corp MSFT.O and Boeing Co

BA.N . No.1 U.S. homebuilder D.R. Horton Inc DHI.N rose 2.5%

after raising the upper end of its forecast for full-year home

sales. Declining issues outnumbered advancers for a 4.08-to-1 ratio

on the NYSE and a 2.86-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and 12 new lows,

while the Nasdaq recorded 27 new highs and 82 new lows.

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