Global shares slide on fear virus’ spread may be unstoppable

Coronavirus Watch

Currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, Feb. 26, 2020. Asian shares slid Wednesday following another sharp fall on Wall Street as fears spread that the growing virus outbreak will put the brakes on the global economy.(AP Photo/Ahn Young-joon)

TOKYO (AP) — Global shares fell Wednesday on growing fears that a new virus’ spread may be unstoppable, hurting global growth considerably.

France’s CAC 40 lost 0.6% to 5,644.47 in early trading, while Germany’s DAX fell 1% to 12,661.83. Britain’s FTSE 100 lost 0.6% to 6,976.95.

U.S. shares appeared set to recoup recent losses with Dow futures up 0.3% at 27,205. S&P 500 futures rose 0.5% to 3,147.

Japan’s benchmark Nikkei 225 declined 0.8% to finish at 22,426.19, while Australia’s S&P/ASX 200 dipped2.3% to 6,708.10.South Korea’s Kospi lost1% to 2,076.77. Hong Kong’s Hang Seng declined0.8% to 26,674.67. The Shanghai Composite fell0.8% to 2,987.93.

Shares fell in Taiwan and most of Southeast Asia but rose in Malaysia following recent losses due to political turmoil.

On Wall Street, the S&P 500 has lost 7.6% in the last four days since hitting a record high last Wednesday. That’s the benchmark index’s worst such stretch since the end of 2018, resulting in $2.14 trillion in losses, according to S&P Global. Tuesday also marked the first back-to-back 3% losses for the index since the summer of 2015.

The latest wave of selling came as more companies, including United Airlines and Mastercard, warned the outbreak of a new coronavirus will hurt their finances, and more cases were reported in Europe and the Middle East, far from the epicenter in China. Meanwhile, U.S. health officials called on Americans to be prepared for the disease to spread in the United States, where there are currently just a few dozen cases.

The Dow Jones Industrial Average dropped 879 points, for a two-day loss of 1,911 points. Travel-related stocks took another drubbing, bringing the two-day loss for American Airlines to 16.9%. The large publicly traded cruise operators have also suffered double-digit losses.

The worst-case scenario for investors — where the virus spreads around the world and cripples supply chains and the global economy — hasn’t changed in the last few weeks. But the probability of it happening has risen, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

“It’s the combination of South Korea, Japan, Italy and even Iran” reporting virus cases, Ma said. “That really woke up the market.”

The viral outbreak that originated in China has now infected more than 80,000 people globally, with more cases being reported in Europe and the Middle East. The majority of cases and deaths remain centered in China, but the rapid spread to other parts of the world has spooked markets and raised fears that it will hurt the global economy.

South Korean virus cases jumped again Wednesday and the U.S. military confirmed its first case among soldiers based in the Asian country, with his case and many others connected to a southeastern city with an illness cluster.

South Korea’s Centers for Disease Control and Prevention said 134 of the 169 new cases were in Daegu, where the government has been mobilizing public health tools to contain the spread of the outbreak.

The U.S. military said the 23-year-old soldier was in self-quarantine at his off-base residence.

On Tuesday, U.S. health officials warned that it’s inevitable the virus will spread more widely in America.

“It’s not so much a question of if this will happen anymore, but rather more a question of exactly when this will happen – and how many people in this country will have severe illness,” Dr. Nancy Messonnier of the Centers for Disease Control and Prevention said in a call with reporters.

United Airlines tumbled 6.5% after withdrawing its financial forecasts for the year because of the impact on demand for air travel. Mastercard dropped 6.7% after saying the impact on cross-border travel and business could cut into its revenue, depending on the duration and severity of the virus outbreak.

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(This story was originally published on Feb. 26, 2020)

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