NEW YORK (Reuters) – Wall Street edged lower on Friday as uncertainties surrounding the coronavirus epidemic and downbeat economic data put a damper on investor sentiment.
While the S&P 500 and the Nasdaq were down only modestly, the industrials-heavy Dow suffered a larger decline.
Having see-sawed through much of the week as buyers took breathers between record index highs, all three major U.S. stock averages were set to head into the holiday weekend having posted their second consecutive weekly advances.
The coronavirus, now called Covid-19, has claimed 1,380 lives and infected 63,851 according to Chinese authorities.
Still, Chinese factories and businesses are slowly coming back online, giving market participants a glimmer of hope that the economic effects of the epidemic, which has rattled world markets and disrupted supply chains, would be limited and near-term.
“The end of this is out there at some point and that gives support to the market knowing this is going to be a temporary issue for the global economy,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “It’s a terrible humanitarian issue, but at some point this goes away.”
Indeed, in a recent Reuters survey of 40 economists, the respondents see China’s economy in the current quarter suffering its slowest growth since the financial crisis, but believe the downturn will be short-lived if the outbreak is contained.
“There’s a lot of uncertainty about the impact of the virus on the first quarter,” Ghriskey added. “There isn’t much clarity on that at this point.”
On the economics front, lackluster retail sales and industrial production data appeared to justify the U.S. Federal Reserve’s wait-and-see stance regarding its accommodative monetary policy, reiterated by Fed Chair Jerome Powell earlier this week in Washington.
The Dow Jones Industrial Average .DJI fell 126.31 points, or 0.43%, to