By Yasin Ebrahim
Investing.com – Stocks turned negative in afternoon trading Wednesday, erasing strong early gains, as a fresh warning the coronavirus is on the "cusp" of becoming a global pandemic stoked worries.
The Dow Jones Industrial Average fell 140 points, or 0.52%, after rising more than 400 points. The S&P 500 slipped 0.49% and Nasdaq Composite fell 0.07%
An FDA official warned the Covid-19 virus is on the "cusp" of being a pandemic, Bloomberg reported. Germany's health minister, meanwhile, said the country is at the beginning of a coronavirus epidemic.
The eerie update from global health authorities turned energy stocks sharply lower as oil prices gave up gains, which had followed data showing U.S. weekly crude supplies rose less than expected.
In a sign the spread of the virus is gathering pace, 83 people in Nassau County New York were reportedly being monitored for exposure to coronavirus, according to published reports.
The updates seemingly forced investors to reassess the risk that the Covid-19 outbreak could be worse than feared, potentially sinking a recovery in the global economy amid easing U.S.-China trade tensions.
But some have tempered those fears somewhat, and suggested the recovery will continue, albeit at a slower pace.
"The impact of the coronavirus on trade in advanced economies has been limited, but if activity in China remains at a standstill for much longer, the damage is likely to be felt much more widely around the world," said Capital Economics' Bethany Beckett.
"The recovery in global trade we had expected this year will be delayed, not derailed," Becket said.
The bid in tech stocks also cooled, with chip stocks paring gains. Nvidia (NASDAQ:NVDA) and Micron (NASDAQ:MU) were up just 2% after boasting gains of more than 4% just before the midday retreat in the broader market.
Investors also digested the latest wave of quarterly earnings.
The Wendy’s (NASDAQ:WEN) fell 3% as weaker guidance offset earnings that topped Wall Street estimates.
Lowe’s (NYSE:LOW) slipped 4% as traders weighed up the home-improvement retailer's weaker-than-expected revenue and comparable sales against better-than-expected earnings.
Toll Brothers (NYSE:TOL) plunged 13% after missing consensus estimates on both the top and bottom lines.
Virgin Galactic (NYSE:SPCE), meanwhile, said losses widened to $73 million from $46 million a year earlier, sending its share price down 6%.