Closing Bell: Precious Metals Rise, Stocks Drop On Coronavirus Fears
Precious metals capitalize on weak equity markets, Intel’s big day and more in Friday’s Closing Bell on Money and Markets.
The Top Story
Markets were rattled Friday as a second coronavirus case was confirmed in the U.S. and the death toll in China rose.
Travel-related stocks took the brunt of the downward sentiment. Shares of American Airlines Group Inc. (Nasdaq: AAL) fell 4% while Delta Airlines Holdings Inc. (Nasdaq: UAL) fell 2.4%. The 10-year Treasury yield also dipped below 1.68%
“You could see going into the weekend the 10-year Treasury yield is down, gold is higher, the market is in a textbook defensive state,” said Quincy Krosby, chief market strategist at Prudential Financial to CNBC. “We had a market that was poised for a bout of profit-taking and this is it.”
Additionally, the Cboe Volatility Index moved up 20% to above 15 for the first time since the first of the year.
All three major markets were on their way to their first weekly losses of the new year.
Money and Markets: Closing Bell*
S&P 500: 3,295 (-30 points, -0.9%)
DOW: 28,989 (-170 points, -0.5%)
NASDAQ: 9,314 (-87 points, -0.9%)
GOLD: $1,570.70 (+8.30, +0.5%)
BITCOIN: $8,500 (+$107.94, +1.2%)
U.S. 10-YEAR YIELD: 1.68%
*- as of 4:25 p.m.
A Big Win and Big Loss
Telefonaktiebolaget LM Ericsson (Nasdaq: ERIC) reported lower profits and higher costs in its recent quarterly report. As a result, shares of the Swedish-based telecom company dropped 7.2% Friday.
Payment processing company Wex Inc. (NYSE: WEX) is acquiring eNett and Optal for $1.275 million and 2 million shares of common stock. eNett is a B2B payments company aimed at the travel industry.
Colgate-Palmolive Co. (NYSE: CL) has agreed to acquire Hello Products LLC from Tenth Avenue Holdings. Terms of the deal were not disclosed. Hello Products makes toothpaste, mouth rinse, toothbrushes and floss.
Siemens AG has signed a deal to acquire India-based C&S Electric Ltd. for approximately $294 million. C&S supplies low-voltage switchgear components and panels.
As investors continued to worry about the coronavirus in China, precious metals gained additional support to close the week.
Gold moved up $8.30 to $1,570.70 an ounce while silver moved over the $18 mark. Platinum was up $3 to $1,005 an ounce and palladium dropped $42 to $2,299 an ounce.
Support for gold started to strengthen after starting the week lower. Kitco News reported virus news along with the Federal Reserve meeting next week could push precious metal prices even higher next week.
Cannabis stocks looked to close the week on a down note Friday afternoon.
Shares of Aurora Cannabis Inc. (NYSE: ACB) were down 3.8% while Canopy Growth Corp. (NYSE: CGC) fell 7.7%. Cronos Group Inc. (Nasdaq: CRON) tanked 9.2%.
Stock Market Update
After a second U.S. case of coronavirus was confirmed, U.S. markets dropped across the board.
The Dow Jones Industrial Average fell 170 points, or 0.5% to 28,989. The S&P 500 dropped sharply by 0.9% and the Nasdaq Composite fell 0.9%.
Treasury bond yields continued to move lower, which could signal a warning to equities markets.
The 10-year yield fell from 1.83% to 1.68% this week — the lowest bond yield percentage since November — and it could move even lower.
“The question is what’s the economy going to do this year, and I think right now the 10-year note is saying we don’t really know, but given what we’ve seen in 2020, it’s telling us we should hedge the other way,” said Gregory Faranello, head of U.S. rates at AmeriVet Securities to CNBC.
Today’s Big Winners:
Intel Corp. (Nasdaq: INTC) +8.1%
Davita Inc. (NYSE: DVA) +3.3%
Artista Networks Inc. (NYSE: ANET) +3.5%
American Express Co. (NYSE: AXP) +2.8%
Willis Towers Watson PLC (Nasdaq: WLTW) +1.1%
Today’s Big Losers:
Discover Financial Services (NYSE: DFS) -11.1%
Synchrony Financial (NYSE: SYF) -9.8%
Trip.com Group Ltd. (Nasdaq: TCOM) -6.8%
American Airlines Group Inc. (Nasdaq: AAL) -4%
United Airlines Holdings Inc. (Nasdaq: UAL) -3.5%
Check back for the most important news and numbers each day after the Closing Bell, only on Money and Markets.
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