It unwinds fast, doesn’t it? It takes so long for the markets to grind higher, then just a day or two to undo months of steady work. With the S&P 500 falling over 3.5% at one point, it was a tough Monday in the stock market today.
The Nasdaq Composite shed over 4% at one point while the Dow Jones Industrial Average dropped more than 1,000 points. There will certainly be some surprised investors when they get home from work and flip on the news.
So what’s driving the decline? As we’ve suspected it would, the coronavirus from China is starting to cause worry. A number of companies have come out and said it will impact their results too. That’s everyone from Apple (NASDAQ:AAPL) to Procter & Gamble (NYSE:PG) and more. But investors know it will be more, as the Chinese economy ground to a halt for several weeks.
Now, the virus is spreading quickly in other countries. Even when it appeared to be contained in China, there was going to be economic repercussions. With it spreading in Europe, Asia and other parts of the world now too, the ex-China growth is picking up momentum.
The hardest hit European country is Italy, which saw its stock market fall almost 5.5%. The Dax (Germany), Ibex (Spain) and the Stoxx 600 (Europe) each fell about about 4% in the stock market today too.
It also comes as little surprise that the iShares Barclays 20+ Year Treasury Bond ETF (NASDAQ:TLT) and SPDR Gold Trust ETF (NYSEARCA:GLD) each hit new 52-week highs on Monday.
Movers in the Stock Market Today
Gilead Sciences (NASDAQ:GILD) was one of the few winners in the stock market today, with shares rising 4.6%. Driving GILD shares higher? The World Health Organization said that the company’s remdesivir drug is the one drug that “we think may have efficacy.” That bodes well for Gilead, as governments look to contain the coronavirus as best as possible.
Regeneron (NASDAQ:REGN) also gained on the day, up 5.5%. Along with the S&P 500 and Nasdaq, it was one of our top stock trades for Tuesday.
Mallinckrodt (NYSE:MNK) cratered 50% at one point, but pared its losses to “just” 18.6%. It wasn’t due to the coronavirus, though. Instead, reports say the company is mulling a Chapter 11 bankruptcy for its genetic drugs business due to the opioid epidemic. Teva (NYSE:TEVA) slid almost 4% in sympathy.
Intel (NASDAQ:INTC) announced its first 5G-integrated chip platform on Monday. The 10-nanometer Atom P9500 will power wireless base stations, as Intel looks to capture 40% market share by 2021. Despite the news, Intel stock still fell 4% on the day. However, it fared much better than its peers. Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) slipped 7.8% and 7.1%, respectively.
Cronos Group (NASDAQ:CRON) shares slipped double digits, down 10.9%. The move comes after the company delayed its earnings report. After seeing a sizable bounce in the fourth quarter, the cannabis group was looking better entering 2020. But now, many of the stocks are struggling to find momentum.
Amid the decline in the stock market today, energy stocks continue to suffer the most. The Energy Select Sector SPDR ETF (NYSEARCA:XLE) slid 4.7% and hit new 52-week lows, as did the VanEck Oil Services ETF (NYSEARCA:OIH). Many energy names are making new lows, while Exxon Mobil (NYSE:XOM) is hitting a decade low when looking at an unadjusted dividend chart.
Heard on the Street
Could Roku (NASDAQ:ROKU) benefit from a Bernie Sanders presidential victory? According to D.A. Davidson analysts, the answer may be yes. Sanders’ plan to bring internet to all would be a big win for the streaming giant, they argue. They maintain their “buy” rating and have a $185 price target on the stock, implying about 60% upside.
While Amazon (NASDAQ:AMZN) was under pressure in the stock market today, that didn’t stop one analyst from publishing their bullish note. Morgan Stanley analysts note that one-day shipping should continue increasing in 2020, further elevating Amazon over its peers. They have a $2,400 price target on the stock.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL, NVDA and ROKU.