- Wall Street’s main indexes fell more than 1% on Monday as investors worried about the economic fallout of a virus outbreak in China that has prompted the country to extend the Lunar New Year holidays and businesses to close some operations.
The benchmark S&P 500 was jolted off record highs last week as China locked down several cities and curbed travel, reminding investors of the deadly SARS virus that killed nearly 800 people in 2002-03 and cost the global economy billions. Travel-related stocks, including airlines, casinos and hotels, were the worst-hit on Wall Street, while shares of sectors exposed to China’s growth, including technology, materials and energy, pressured the markets.
“We’d a strong market heading into the year and there was a little bit of over-confidence,” said Jason Pride, chief investment officer of private wealth at Glenmede in Philadelphia. “5-10% corrections are typical for any given year in equity markets. Maybe this time around, there is a larger economic risk posed by this outbreak because the epicenter of the outbreak is exactly the reason for concern from last year.”