Shares have fallen in Asia after President Donald Trump announced the U.S. was stepping up its efforts to combat the virus outbreak that began in China
Shares fell in Asia on Thursday after President Donald Trump announced the U.S. was stepping up its efforts to combat the virus outbreak that began in China, as the number of cases surpassed 81,000.
Japan’s Nikkei 225 index lost 2.1% to 21,948.23, while in Australia, the S&P ASX/200 dropped 0.8% to 6,657.90. Hong Kong’s Hang Seng lost 0.8% to 26,491.52.
In South Korea, where 334 new cases of the virus were reported, the Kospi dropped 1% to 2,056.76. The central bank downgraded its growth estimate for 2020 to 2.1% from 2.3% and said the virus outbreak would have a short-term impact on business activity, after growth fell to its slowest in a decade last year. The Bank of Korea kept its key policy rate unchanged, at its current record low 1.25%.
The Shanghai Composite index rose 0.2% to 2,993.15, while shares fell in Taiwan and most of Southeast Asia. Thailand’s benchmark rose 0.4% after tumbling 5.1% on Wednesday following reports of newly discovered virus cases.
Trump told reporters late Wednesday that he was open to spending “whatever’s appropriate” to fight the virus, after the Senate Democratic Leader Chuck Schumer of New York suggested $8.5 billion instead of the requested $2.5 billion. He put Vice President Mike Pence in charge of the effort.
But health officials standing beside Trump warned more infections are coming. And shortly after Trump spoke, the government announced that another person in the U.S. was infected — someone in California who appears not to have the usual risk factors of having traveled abroad or being exposed to another patient.
Major U.S. stock indexes gave up early gains, closing mostly lower Wednesday and extending the market’s heavy losses for the week.
“Previous crisis playbooks have all revolved around buying the dip in equities, so I wonder just how much further the fire sale will go before the market at least starts to scale in again,” Stephen Innes of AxiCorp. said in a report. “But based on last night’s price action, it does appear that any bounce in stocks is likely to be short-lived. And eventually, the markets could fall deeper as investors start to think what’s the point of trying to pick the bottom in the short term.”
The future contracts for both the Dow Jones Industrial Average and the S&P 500 were down 1.5%.
The S&P 500 index fell 0.4% to 3,116.39. It’s on track for its biggest monthly decline since May. The Dow dropped 123.77 points, or 0.5%, to 26,957.59, for a three-day loss of 2,034 points. A modest rally in technology stocks helped nudge the Nasdaq composite to a 0.2% gain, to 8,980.77.
Smaller company stocks fell the most. The Russell 2000 index lost 0.5% to 1,724.76.
Cruise operators continued falling amid persistent virus fears. Norwegian Cruise Line Holdings fell 7.9%, Royal Caribbean Cruises dropped 8.1% and Carnival slid 7.5%.
Other companies that depend on travelers also declined. Expedia lost 7.1%.
Technology stocks eked out a modest gain. The tech sector was among the worst hit by sell-offs this week as many of the companies rely on global sales and supply chains that could be stifled by the spreading outbreak. Microsoft rose 1.2% and Adobe rose 1%.
Investors have been moving more money from stocks into bonds in the wake of the outbreak. Traders are concerned the global economy could slow down as the world’s second-largest economy struggles to contain the outbreak.
The yield on the 10-year Treasury was at 1.30% Thursday, down from 1.34%. The yield on the 3-month Treasury bill edged up to 1.51%. The inversion in the yield between the 10-year and the 3-month Treasurys is a red flag for investors because it has preceded the last seven recessions.
Energy companies led the selling Wednesday as the price of U.S. crude oil fell 2.3% on Wednesday.
By midday Thursday, benchmark crude had shed 73 cents to $48.00 in electronic trading on the New York Mercantile Exchange. On Wednesday it lost $1.17 to settle at $48.73 a barrel. Brent crude oil, the international standard, shed 75 cents to $52.06 per barrel. It dropped $1.52 to close at $53.43 a barrel in London.
Gold jumped $10.60 to $1,653.70 per ounce, silver rose 24 cents to $18.07 per ounce and copper fell 2 cents to $2.58 per pound.
The dollar fell to 110.05 Japanese yen from 110.40 yen on Wednesday. The euro strengthened to $1.0906 from $1.0884.
AP Business Writers Alex Veiga and Damian J. Troise contributed.