U.S. and global markets took a collective nosedive Monday with the spread of the coronavirus mounting outside of China and more in today’s Closing Bell on Money and Markets.
The Top Story
Well, the ride was fun while it lasted.
In the first two months of 2020, U.S. equities markets have enjoyed their best run as indices like the S&P 500 and Nasdaq Composite enjoyed record highs.
That all came to a crashing halt Monday after South Korea and Italy both reported a surge in the coronavirus outbreak. South Korean officials raised the virus alert to the “highest level” while Italian officials have more than 150 reported cases and five deaths.
Additionally, Iraq and Afghanistan reported their first cases.
The news pushed shares down across the board with companies like Apple Inc. (Nasdaq: AAPL) and others reliant on the Chinese supply chain bearing a brunt.
But Apple wasn’t the only one getting bit by the virus — not even close. Travel stocks like Norwegian Cruise Lines Holdings Ltd. (NYSE: NCLH), American Airlines Group Inc. (Nasdaq: AAL), Carnival Corp. (NYSE: CCL) and Royal Caribbean Cruises Ltd. (NYSE: RCL) all suffered losses of more than 7% through afternoon trading.
The Cboe Volatility Index — a strong fear gauge on Wall Street — also was up more than six points to 23.
The Dow Jones Industrial Average closed down 1,031 points — giving back all of its gains from January and February. The 3.5% drop was the biggest percentage-point drop since February 2018.
The S&P 500 dropped 3.3%, or 111 points, and the Nasdaq fell 3.7%, or 355 points.
Money and Markets: Closing Bell*
S&P 500: 3,225 (-111 points, -3.3%)
DOW: 27,960 (-1,031 points, -3.5%)
NASDAQ: 9,221 (-355 points, -3.7%)
GOLD: $1,658.70 (+$15.70, +0.9%)
BITCOIN: $9,570 (-$287.53, -2.9%)
U.S. 10-YEAR YIELD: 1.36%
*- as of 4:21 p.m.
A Big Win and Big Loss
This morning, we told you about Intuit Inc. (Nasdaq: INTU) and its bid to buy personal finance company Credit Karma Inc. for $7 billion. Intuit shares fell 3.7%.
While Warren Buffett delivered his annual letter to shareholders over the weekend, it did little to help Berkshire Hathaway (NYSE: BRK.B) Monday. Shares of Berkshire Hathaway fell 3%.
M&A News
Perrigo Co. (NYSE: PRGO) is acquiring the oral care assets of High Ridge Brands for $113 million. The purchase is subject to bankruptcy court approval as High Ridge has previously filed for Chapter 11 bankruptcy protection.
Golden Nuggets
When U.S. equities have a bad day, precious metals are usually on the upswing. Monday was no different.
Gold futures moved 0.8% while stock markets suffered a free-fall. Investors continued to jump on the safe-haven bandwagon amid the market plunge.
Gold moved up to $1,662.80 an ounce while silver futures also jumped nearly 0.6% to $18.64 an ounce.
Platinum did suffer a 0.8% drop to $967.60 an ounce and palladium dropped to $2,539 an ounce.
Cannabis Corner
International cannabis company Cronos Group Inc. (Nasdaq: CRON) is delaying its 2019 fourth quarter and yearly earnings.
It was originally scheduled for Thursday, but due to a “delay in the completion of its financial statements,” the company is postponing its release. There is no set date on when the earnings will be released.
Shares of Cronos Group fell 10.9% in afternoon trading.
In other cannabis news, Mississippi lawmakers have filed several bills related to a ballot initiative to legalize medical marijuana in the state.
If approved, medical marijuana activists say it could split the vote as the new measures are more vague than the original ballot question.
Stock Market Update: Closing Bell
If it wasn’t bad enough for markets, oil reached bear market conditions Monday.
West Texas Crude dropped 3.6% to $51.43 a barrel — its worst day since the first part of January. Brent crude fell 3.8% to $56.30 a barrel.
Analysts cut their oil outlook Monday after a jump in coronavirus cases spooked the market.
“There is no escaping the fact that China — the world’s largest oil importer — will have meaningfully weaker near-term oil demand than we had envisioned as the year began,” Morgan Stanley analyst Pavel Molchanov wrote in a note to clients Monday.
Molchanov said that since the virus and weather issues are transitory, “the global oil market will need sustainably higher prices in order to avoid a major undersupply in 2021 and beyond.”
Today’s Big Winners:
Regeneron Pharmaceuticals Inc. (Nasdaq: REGN) +5.5%
Gilead Sciences Inc. (Nasdaq: GILD) +4.6%
Newmont Corp. (NYSE: NEM) +1.6%
Clorox Co. (NYSE: CLX) +1.6%
Mosaic Co. (NYSE: MOS) +1.1%
Today’s Big Losers:
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) -9.3%
American Airlines Group Inc. (Nasdaq: AAL) -8.5%
Carnival Corp. (NYSE: CCL) -9.4%
Royal Caribbean Cruises Ltd. (NYSE: RCL) -8.9%
UnitedHealth Group Inc. (NYSE: UNH) -7.8%
Check back for the most important news and numbers each day after the Closing Bell, only on Money and Markets.
Don’t forget about “Marijuana Markets: a POTcast,” featuring the biggest cannabis news and investment notes from Banyan Hill’s Anthony Planas, here on Money and Markets each Saturday morning.