US Stocks Slide After Early Gains      02/26 16:26

   Major U.S. stock indexes gave up early gains and closed mostly lower 
Wednesday, extending the market's heavy losses for the week.

   (AP) -- Major U.S. stock indexes gave up early gains and closed mostly lower 
Wednesday, extending the market's heavy losses for the week.

   The benchmark S&P 500 fell for the fifth straight day after swinging between 
a 0.6% loss and 1.7% gain. Smaller company stocks bore the brunt of the 
selling. The bond market continued to flash warning signs as long-term Treasury 
yields fell further below short-term yields.

   Worry about economic fallout from the virus outbreak that originated in 
China has fueled a sharp sell-off this week that's wiped out the market's gains 
for the year.

   The virus continues to spread and threatens to hurt industrial production, 
consumer spending, and travel. More cases are being reported in Europe and the 
Middle East. Health officials in the U.S. have been warning Americans to 
prepare for the virus.

   "The market is still digesting the full impact of what the coronavirus could 
mean for global GDP growth and, more importantly, on earnings growth for a lot 
of companies," said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private 
Bank.

   The S&P 500 index fell 0.4%. It's on track for its biggest monthly decline 
since May. The Dow Jones Industrial Average dropped 123.77 points, 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.

   Smaller company stocks fell the most. The Russell 2000 index lost 1.2%. 

   European markets were mostly higher and Asian markets fell. 

   A burst of morning buying had stocks on track for modest gains, but the 
rally mostly faded by the end of the day, reflecting ongoing concerns among 
investors about the new coronavirus.

   The outbreak has now infected more than 81,000 people globally and continues 
spreading. Brazil has confirmed the first case in Latin America. Germany, 
France and Spain were among the European nations with growing caseloads. New 
cases are also being reported in several Middle Eastern nations.

   U.S. cases currently total 57, and the White House has requested $2.5 
billion for vaccine development, treatment and protective equipment. On 
Tuesday, U.S. health officials called on Americans to be prepared for the 
disease to spread in the United States.

   Bond yields headed lower for much of the day, but then recovered mostly. The 
yield on the 10-year Treasury inched up to 1.34% from 1.33% late Tuesday. 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 been a warning signal that has a fairly accurate 
track record of preceding the last seven recessions.

   "The bond market is sending us some warning signals that we should pay 
attention to and that's what you see playing out in the market today," Lovell 
said.

   Investors have been moving more money 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.

   "A slowdown definitely is on the horizon, but it's transitory," Lovell said. 
"I would expect economic growth to reaccelerate in the back half of the year as 
China starts to come online."

   Energy companies led the selling Wednesday as the price of U.S. crude oil 
fell 2.3%.

   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%.

   TJX, the parent of retailer TJ Maxx, surged 7.2% after beating Wall Street's 
fourth-quarter profit forecasts and raising its dividend.

   Disney fell 3.8% a day after Bob Iger's surprise announcement that he will 
immediately step down as CEO of the giant entertainment company. Iger steered 
the company's absorption of big moneymakers, including Star Wars, Pixar, Marvel 
and Fox's entertainment businesses. He also oversaw the launch of the Disney 
Plus streaming video service.

   Toll Brothers slid 14.6% after the homebuilder reported disappointing fiscal 
first-quarter profit. The poor results weighed on nearly all homebuilder 
stocks. D.R. Horton fell 2.6%.

   A government report Wednesday showed that sales of new homes jumped 7.9% in 
January to the fastest pace in more than 12 years.

   MARKET ROUNDUP: 

   The S&P 500 index fell 11.82 points, or 0.4%, to 3,116.39. The Dow dropped 
123.77 points, or 0.5%, to 26,957.59.

   The Nasdaq gained 15.16 points, or 0.2%, to 8,980.77. The Russell 200 index 
of smaller company stocks dropped 19.14 points, or 1.2%, to 1,552.76.

   Benchmark crude oil fell $1.17 to settle at $48.73 a barrel. Brent crude 
oil, the international standard, dropped $1.52 to close at $53.43 a barrel. 
Wholesale gasoline fell 8 cents to $1.45 per gallon. Heating oil declined 7 
cents to $1.50 per gallon. Natural gas fell 3 cents to $1.82 per 1,000 cubic 
feet.

   Gold fell $6.90 to $1,640.00 per ounce, silver fell 36 cents to $17.83 per 
ounce and copper fell 1 cent to $2.58 per pound.

   The dollar rose to 110.22 Japanese yen from 110.12 yen on Tuesday. The euro 
strengthened to $1.0897 from $1.0881.


(CZ)