Stocks slump as gold, oil gain

Commodites attracted new money as stocks saw outflows

U.S. stocks closed lower on Wednesday but off the worst levels of the session as investors rotated some money into gold and oil.

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The selling pushed the S&P 500 and the Nasdaq Composite off record highs and the Dow Jones Industrial Average lost over 128 points but came back from a 300 plus point drop.

TickerSecurityLastChangeChange %
SP500S&P 5002659.41-4.27-0.16%
I:DJIDOW JONES AVERAGES22653.86-26.13-0.12%
I:COMPNASDAQ COMPOSITE INDEX7887.25968-25.98-0.33%

As stocks saw a shakeout, oil and gold moved higher.

The yellow metal rose to $1,622 an ounce, its highest in almost seven years. West Texas Intermediate crude oil was also higher at $53.78 a barrel.

U.S. Treasurys rallied, pushing the yield on the 10-year note down 5.6 basis points to 1.514 percent.

Investors took in comments from Fed Vice Chairman Richard Clarida who told CNBC the market was too aggressive in pricing in a Fed rate cut later this year which investors including Keith Fitzgerald of Money Map Press cited as the catalyst for the dip in equities.

TickerSecurityLastChangeChange %
USOUNITED STATES OIL FUND L.P.5.09-0.39-7.12%
GLDSPDR GOLD SHARES TRUST - EUR ACC156.04-0.84-0.54%

Fears over the coronavirus also remain front and center for global investors.

The People’s Bank of China cut its loan prime rate 10 basis points to 4.05 percent in a move designed to help cushion the Chinese economy from the damage caused by the coronavirus outbreak.

China’s National Health Commission said at least 74,576 people in the country have been sickened by the coronavirus outbreak, which has killed 2,118. The number of cases in South Korea, which reported its first death due to the virus, more than doubled to 82.

Procter & Gamble and Norwegian Cruise Line Holdings were among the U.S.-based companies to warn Thursday that the coronavirus would hit their bottom lines.

P&G said the outbreak would hurt both supply and demand in China.

Meanwhile, Norwegian Cruise Line Holdings reported better-than-expected fourth-quarter results and warned the coronavirus outbreak will put a dent in its bottom line.

TickerSecurityLastChangeChange %
PGPROCTER & GAMBLE COMPANY112.77-5.04-4.28%
NCLHNORWEGIAN CRUISE LINE HOLDINGS LTD.11.01+1.00+9.99%

Elsewhere, Morgan Stanley reached a deal to buy online broker E-Trade for $13 billion in stock, marking the largest takeover by a Wall Street bank since the financial crisis.

The private-equity firm Sycamore Partners has agreed to buy a controlling stake in L Brands’ Victoria’s Secret for $525 million. Chairman and CEO Leslie Wexner will step aside once the deal is completed.

TickerSecurityLastChangeChange %
ETFCE*TRADE GROUP (E*TRADE BANK AG)37.40-0.14-0.37%
MSMORGAN STANLEY36.94-0.07-0.19%
LBL BRANDS INC.13.24+0.69+5.50%

Meanwhile, shares of space-tourism venture Virgin Galactic were lower for the first time in nine days. Shares were up 223 percent this year through Wednesday.

TickerSecurityLastChangeChange %
SPCEVIRGIN GALACTIC HOLDINGS INC.14.07-0.23-1.61%

On the earnings front, ViacomCBS posted a 3 percent drop in revenue in its first earnings report since the two media companies merged late last year.

Six Flags Entertainment lost $11.2 million in the fourth-quarter as park admissions, spending on food and merchandise and sponsorships declined.

TickerSecurityLastChangeChange %
VIACVIACOMCBS INC.14.69+0.75+5.38%
NCLHNORWEGIAN CRUISE LINE HOLDINGS LTD.11.01+1.00+9.99%
SIXSIX FLAGS ENTERTAINMENT13.41+0.77+6.09%

In Europe, Britain’s FTSE was down 0.2 percent while Germany’s DAX and France’s CAC were off 0.6 percent and 0.5 percent, respectively.

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Asian markets ended mixed with China’s Shanghai Composite gaining 1.8 percent and Japan’s Nikkei adding 0.3 percent. Hong Kong’s Hang Seng slid 0.2 percent.