North American stock markets shares and crude prices dropped on Friday amid concerns that a spreading virus from China would curb travel and hurt economic demand.
MSCI’s gauge of stocks across the globe shed 0.42 per cent, weighed down by Wall Street.
But European shares gained, as the STOXX 600 index rose 0.86 per cent, after some encouraging regional economic data.
U.S. health officials confirmed a second U.S. case of the new coronavirus from China in a Chicago woman, as the illness spread around the globe.
“Concern about the extent of this virus out of China is capturing people’s attention,” said Willie Delwiche, investment strategist at Baird in Milwaukee.
“If concerns about a virus lead countries to close borders and restrict trade and travel, then that could have an impact on oil and an impact on global growth,” Delwiche said.
In Toronto, the S&P/TSX composite index was unofficially down 56.44 points, or 0.32 per cent, at 17,565.34.
Led by gold stocks, the materials sector was up 0.7 per cent.
The energy sector dropped 1.8 per cent as crude prices fell, while the financials sector slipped 0.4 per cent.
Health care stocks were down 4.7 per cent as marijuana producers plummeted. Cronos Group Inc. lost 8.8 per cent, while Aphria Inc. and Canopy Growth Corp. slid 8.6 per cent and 7.6 per cent, respectively.
On Wall Street, the Dow Jones Industrial Average fell 170.36 points, or 0.58 per cent, to 28,989.73, the S&P 500 lost 30.09 points, or 0.90 per cent, to 3,295.45 and the Nasdaq Composite dropped 87.57 points, or 0.93 per cent, to 9,314.91
Losses on the major U.S. indexes were limited by an 8.1-per-cent gain in Intel shares following the chip industry’s leader’s better-than-expected forecast.
A survey showed Germany’s private sector gained momentum in January as growth in services activity picked up and the pullback in manufacturing eased. British companies are enjoying their best month in more than a year, another survey showed.
“Sentiment among manufacturers is improving rapidly, meaning that expectations for a 2020 recovery are increasing,” ING economist Bert Colijn said of the euro zone.
U.S. Treasury yields continued their recent declines as the coronavirus uncertainty undermined risk appetite and spurred demand for safe-haven assets.
Benchmark 10-year notes last rose 17/32 in price to yield 1.6822 per cent, from 1.739 per cent late on Thursday.
The dollar index rose 0.17 per cent, with the euro down 0.22 per cent to $1.1028.
The Japanese yen strengthened 0.22 per cent versus the greenback at 109.26 per dollar.
Crude prices fell more than 2 per cent on Friday and headed for a steep weekly decline over concerns that the coronavirus will spread farther in China, the world’s second-largest oil consumer, curbing travel and oil demand.
The virus has prompted the suspension of public transport in 10 Chinese cities, while cases of infection have been found in several other Asian countries and the United States.
Brent crude was down $1.62, or 2.6 per cent, at $60.42). The global benchmark lost 6.8 per cent so far this week, in its third weekly decline.
U.S. crude dropped $1.62, or 2.9 per cent, to $53.97 a barrel and was on course for a 7.8 per cent weekly decline.
“It all about the coronavirus all the time, and we’re not getting signs that things are getting any better,” said Phil Flynn, an analyst at Price Futures Group in Chicago.