European stocks rallied on Friday while Wall Street equities tumbled as markets weighed the potential impact of a spreading viral illness in China.
Chinese authorities expanded a massive quarantine effort in response to coronavirus, while the US confirmed its second case of the SARS-like ailment.
French officials said there had also been two cases found in France, the first in Europe, while Nepal reported South Asia’s first case.
European bourses, which had dropped on Thursday, finished solidly higher on Friday in the first session since the WHO stopped short of declaring a public health emergency.
“There’s a hope that the coronavirus is contained, particularly in China,” Interactive Investor analyst Richard Hunter said. “And that’s something of a relief rally — [and] also with the earning season so far so good.
“So the last few days provided an opportunity to investors to buy on the cheaper side,” Hunter added.
The STOXX 600 index rising 0.86 percent, after some encouraging regional economic data.
A survey showed Germany’s private sector gained momentum this month 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 Group NV economist Bert Colijn said of the eurozone.
US stocks had also opened higher but fell steadily as the session progressed. The Dow Jones Industrial Average fell 170.36 points, or 0.58 percent, to 28,989.73, the S&P 500 lost 30.07 points, or 0.90 percent, to 3,295.47 and the NASDAQ Composite dropped 87.57 points, or 0.93 percent, to 9,314.91.
The NASDAQ touched an intraday record high early in the session before falling.
Losses on the major US indices were limited by an 8.1 percent gain in Intel Corp shares following the chip industry’s leader’s better-than-expected forecast.
Adam Sarhan of 50 Park Investments said the virus still appeared to be contained, but “if we start getting more cases showing up around the world, that would be a bad sign for global economic growth.”
Sarhan said Friday’s losses also reflected profit taking following a run of Wall Street records in recent weeks.
Tourism-oriented stocks were under pressure amid fears of the virus. United Airlines Holdings Inc sank 3.5 percent, Marriott International Inc lost 2.7 percent and Wynn Resorts Ltd fell 3.1 percent.
Additional reporting by Reuters
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