TOKYO (AP) — Asian shares continued to fall Tuesday, dragged down by worries about an outbreak of a new virus in China that threatens global economic growth.
Chinese markets were closed for the New Year’s holidays. Japan’s benchmark Nikkei 225 shed 0.8% in early trading to 23,166.94, while Australia’s S&P/ASX 200 slipped 1.4% to 6,991.70. South Korea’s Kospi dropped 2.5% to 2,191.06.
“While the step-up in remedial and preventive measures to curb and contain, as well as transparency, have vastly improved from SARS, fears of a global contagion are not put to bed,” said Vishnu Varathan at Mizuho Bank in Singapore.
A sell-off on Wall Street gave the Dow its first 5-day losing streak since early August and handed the S&P 500 its worst day since early October. The latest bout of selling on Wall Street came after China announced a sharp rise in cases of the virus.
Airlines, resorts and other companies that rely on travel and tourism suffered steep losses. Gold prices rose as did bonds as traders sought refuge in safer holdings.
“Over the weekend you saw more cases,” said Quincy Krosby, chief market strategist at Prudential Financial. “That got investors and traders worried that this may be a longer event. The next question is, ‘What happens to global growth if this does continue and magnify?'”
The Dow Jones Industrial Average fell 453.93 points, or 1.6%, to 28,535.80. The Dow had been down nearly 550 points. The S&P 500 index dropped 51.84 points, or 1.6%, to 3,243.63. The Nasdaq lost 175.60 points, or 1.9%, to 9,139.31. The Russell 2000 index of smaller company stocks gave up 18.09 points, or 1.1%, to 1,644.14.
Chinese authorities extended the public holiday for the Lunar New Year by an extra three days to limit public gatherings. The virus has spread to a dozen countries, including the U.S. Besides the threat to people’s lives and health, investors are worried about how much damage the virus will do to profits for companies around the world.
Even if they’re thousands of miles away from Wuhan, the interconnected global economy means U.S. companies have plenty of customers and suppliers in China. It’s the world’s second-largest economy, and it accounts for 6% of all revenue for S&P 500 companies over the last 12 months. That’s nearly double any other country besides the United States, according to FactSet.
“Markets hate uncertainty, and the coronavirus is the ultimate uncertainty in that no one knows how badly it will impact the global economy,” said Alec Young, managing director of global markets research at FTSE Russell.
Resort operators were among the biggest losers in the S&P 500. Wynn Resorts led all company’s in the index lower with an 8.1% tumble, while Las Vegas Sands dropped 6.7%. The companies get most of their revenue from the Chinese gambling haven of Macao. MGM Resorts fell 3.9%.
American Airlines lost 5.5% and Delta dropped 3.4% as part of a broad slide for airlines because of concerns international travel will decline amid the virus’ spread.
Booking companies and cruise-line operators also got hurt. Expedia Group fell 2.7% and Carnival slid 4.7%.
Chinese companies that trade shares in the U.S. also declined. Search engine operator Baidu fell 2.9% and e-commerce company JD.com dropped 4.8%.
The technology sector, the biggest in the S&P 500, also saw heavy selling. Apple, which relies on China for supplies and sales, fell 2.9%.
Financial stocks also took steep losses. Citigroup dropped 2.2%.
Energy stocks fell broadly as U.S. oil prices fell 1.9% on worries about reduced demand from China. Schlumberger skidded 5.1%.
Utilities, real estate stocks and household goods makers held up better than the rest of the market, though they still finished in the red. The sectors are viewed as less-risky and are not as affected by international issues and developments.
Investors are also dealing with a heavy week of corporate earnings. Apple will report financial results on Tuesday. Pharmaceutical giant Pfizer and Starbucks will also report.
Boeing, McDonald’s, Coca-Cola and Amazon are also among some of the biggest names reporting earnings throughout the week that includes 147 S&P 500 companies.
Benchmark crude oil lost 28 cents to $52.86 a barrel. Brent crude oil, the international standard, fell 24 cents to $58.34.
The dollar inched down to 108.91 Japanese yen from 108.94 yen on Monday. The euro was also little changed at $1.1019 from $1.1020.
AP Business Writers Alex Veiga and Damian J. Troise contributed.
(This story was originally published on January 27, 2020)