By Syndication Washington Post, Bloomberg · Brendan Walsh, Vildana Hajric
The S&P 500 index posted its biggest drop since October amid reports that U.S. officials had confirmed two more cases of the illness, which originated in China and has also spread to several countries in Asia and to Europe. Benchmark Treasury yields fell to a three-month low, while the dollar advanced for a second day.
Investors are exercising caution with stocks close to all-time highs, cognizant of the chance the respiratory virus migrates across the world and develops into a more devastating pandemic like the SARS illness that emerged 17 years ago. Officials in China boosted travel restrictions to cover 40 million people to contain the virus's spread.
"Investors can't help but be unnerved by constant headlines of new cases all over the world," said Alec Young, managing director of global markets research at FTSE Russell. "To make matters worse, the market will be closed when we get the next update on the virus' spread over the weekend. As such, this is quickly turning into a sell first, ask questions later environment."
In company news, United Airlines Holdings Inc. and American Airlines Group Inc. each slid more than 3% on concern the virus will limit demand for air travel and tourism. Financial shares also sank, with Citigroup Inc. down almost 2% as UBS warned the sector could be hurt by less credit-card spending and a decline in cross-border payments.
Health shares were among the worst performers Friday on growing speculation that upcoming elections in the U.S. may prompt lawmakers to take action on the increasing cost of medicines in the U.S. Intel Corp. was a rare bright spot after giving a bullish revenue forecast.
Elsewhere, the pound slipped for a second day versus the dollar, giving back some of its rally from earlier in the week.
These are the main moves in markets:
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- The S&P 500 index fell 0.9% at the close of trading in New York; it lost 1% for the week.
- The Stoxx Europe 600 index added 0.9%.
- The MSCI AC Asia Pacific index fell 0.1%.
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- The Bloomberg Dollar Spot index gained 0.1%.
- The British pound declined 0.4% to $1.3076.
- The euro fell 0.3% to $1.1027.
- The Japanese yen rose 0.2% to 109.29 per dollar.
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- The yield on 10-year Treasuries fell five basis points 1.69%.
- Britain's 10-year yield dipped three basis points to 0.56%.
- Germany's 10-year yield fell three basis points to -0.34%.
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- West Texas Intermediate crude declined 2.2% to $54.39 a barrel.
- Gold rose 0.5% to $1,571.30 an ounce.
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With assistance from Bloomberg's Cecile Gutscher, Adam Haigh and Brian Chappatta.