North American stock markets fall on sharp jump in reported cases of coronavirus

TORONTO – North American stock markets were pulled lower Thursday by a sharp jump in the reported number of novel coronavirus cases in China.

The key energy sector dropped on the TSX on fears about reduced Chinese demand with a rise in the cases of the virus, now known as COVID-19.

China reported 254 new deaths and an increase in virus cases of 15,152, after the hardest-hit province of Hubei applied a new classification system that broadens the scope of diagnoses for the outbreak.

As of Thursday, China had 1,367 deaths among 59,804 confirmed cases.

“The big challenge there is with Chinese consumers just basically locking themselves in their homes [and] energy use is down quite substantially,” said Michael Greenberg, portfolio manager, Franklin Templeton Multi-Asset Solutions.

The S&P/TSX composite index closed down 11.68 points at 17,821.17 after hitting an intraday low of 17,750.78.

In New York, the Dow Jones industrial average lost 128.11 points at 29,423.31. Despite setting record highs earlier in the day, the S&P 500 index closed down 5.51 points at 3,373.94, while the Nasdaq composite was down 13.99 points at 9,711.97.

Markets initially fell but later climbed after it became clear that a new diagnostic method may have artificially inflated the numbers by lowering the bar for classifying new infections.

“As the onion gets peeled back a little bit we realize it’s actually not a one-day jump, it’s a change in reporting,” Greenberg said in an interview.

Investors don’t have a lot of faith in the Chinese sickness count, he said.

“There’s always been skepticism towards Chinese economic data, so many people are thinking why should this be different and that’s a bit of concern.”

It was a bit of a mixed bag on the TSX with defensive sectors like

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