Stocks Nosedive for Second Straight Day as US Health Officials Stoke Coronavirus Fears
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Stocks continued to slide today amid U.S. public health officials’ warning that the coronavirus is likely to spread within the United States.
Following a more than 1,000-point loss on Monday — the worst performance in two years — the Dow Jones Industrial Average continued its descent today, plummeting by 880 points (3.15%) to end Tuesday trading. The Nasdaq Composite and the S&P 500 also closed down, with the Nasdaq slipping by 255.67 points (2.77%) and the S&P falling by 97.57 points (3.02%).
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In mid-afternoon trading, the Dow was down by as much as 900 points, taking a nosedive after comments from Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention.
“It’s not so much a question of if [the coronavirus will spread to U.S. communities] anymore, but rather more a question of exactly when this will happen and how many people in this country will have severe illness,” Messonnier said at a press briefing. “We are asking the American public to prepare for the expectation that this might be bad.”
As Wall Street went into a selling frenzy, major footwear firms dipped in tandem, with many taking hits for the second straight day. Nordstrom Inc. was among the shoe players to see larger declines, with shares slipping by 5.5%, add to yesterday’s losses of around 4%. Caleres Inc. and Under Armour also saw sizable drops, with shares falling by 5.10% and 4.23%, respectively.
Tapestry Inc., Designer Brands Inc. and Skechers USA Inc. were among the shoe companies taking the biggest hits yesterday, experiencing losses of 8.72%, 8.07% and 7.45%, respectively. Those companies saw stocks slide again today: Tapestry shares fell 4.66%, DBI stock was trading down 4.25% and Skechers saw losses of 3.95%.
Meanwhile, Nike Inc, which ended Monday down 4.32%, saw another round of losses today, with shares trading down 3.15% at market close. Steve Madden, Ltd. and Shoe Carnival, Inc. also saw relatively more modest losses, with shared dropping by 2.29% and 1.77%, respectively.
More than 80,200 cases of coronavirus have been confirmed, with over 2,700 deaths reported. The virus, which originated in the central Chinese city of Wuhan, had remained mostly contained within China’s mainland, but Monday there was a significant uptick in cases outside the country, particularly in South Korea and Italy, which fueled Wall Street’s worries. In the U.S., 57 cases of the virus have been confirmed as of press time.
In response to coronavirus, many fashion and footwear firms with operations in China, including Nike, Skechers and Tapestry, have chosen to shutter outposts or reduce operating hours in heavily infected areas. This has resulted in lower sales, which could hurt companies’ fiscal year bottom lines. Meanwhile, restrictions on outbound travel in China have also slowed manufacturing and production time lines, at a time when workers have been delayed in returning to factories and corporate offices.
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