Stock Market Update Sunday, February, 2020
Stocks were all over the place last week.
And although it was a Fed week and there were plenty of earnings to digest, last week’s moves were really all about the coronavirus.
On Monday, stocks were down big after coronavirus developments over the weekend. With China restricting travel in the country and the U.S. State Department urging citizens to reconsider travel, traders began to worry about the impact on the global economy.
Then on Tuesday, stocks rallied after strong earnings from Apple (AAPL) and a “buy the dip” mentality.
The Fed kept rates unchanged on Wednesday and stocks finished the day mixed. But with traders focused on earnings and the coronavirus, the Fed comments were really just a blip on the radar last week.
On Thursday, stocks experienced a big swing after the World Health Organization (WHO) declared the coronavirus a global health emergency. But surprinsingly, the move was to the upside (most likely because WHO didn’t recommend travel restrictions, and the emergency declaration could make it easier to use financial and political resources to tackle and contain the virus).
Then on Friday stocks plunged with the DOW down 600 points (its worst day since August). The DOW led the major indices lower with a 2.1% loss. And with Friday’s drop, the DOW and S&P are both negative for the year.
Here’s what traders were focused on :
Earnings – 226 companies in the S&P 500 have reported. And 70% of these companies have beaten analyst expectations (according to FactSet).
Coronavirus – With the virus spreading, traders are really starting to worry about its impact on the global economy. And the impact is real…Google has temporarily closed offices in China, Starbucks has closed more than half of its Chinese locations, and General Motors will keep its Chinese factories shut down through February 9th. Then on Friday, Delta, American and United Airlines all suspended flights between China and the U.S. There are now more than 9,500 confirmed cases and 213 deaths, with the virus spreading to 18 other countries.
Here’s where the major indices ended the week:
- The S&P finished with a 2.1% loss. Down 70 points, the S&P ended at 3,226.
- The DOW ended lower by 2.5%. Dropping 734 points, the DOW closed at 28,256.
- The NASDAQ was down 1.8%. With a 165 point loss, the NASDAQ finished at 9,150.
Crude Oil (CL) was down for the 4th week straight. Down 5.0%, CL ended the week at $51.56 a barrel. Crude Oil finished the month of January with a 15.8% loss.
Airline stocks suffered on Friday, after announcing flight cancellations to China.
American (AAL) lost 3.2%, United (UAL) dropped 3.8%. And Delta (DAL) was down 2.4%.
Caterpillar (CAT) reported earnings and dropped 3.0% after disappointing earnings and warning about “global economic uncertainty.”
But Amazon (AMZN) bucked the market downtrend and finished Friday with a 7.4% gain after a huge earnings beat.
IBM (IBM) was another green dot in a sea of red on Friday. The stock finished higher by 5.1% after news of a CEO change.
This week the coronavirus will continue to dominate the news. Traders will also keep an eye on earnings (GOOGL, DIS, QCOM, TWTR, UBER and others) and Friday’s Jobs Report.
Here is the economic calendar for the week:
Real Time Economic Calendar provided by Investing.com.
This Stock Market Update was provided by Rockwell Trading Services LLC.