The Week In Review: China Viras and Mixed Earnings

Troy Hoffman Contributor
The Week In Review: China Viras and Mixed Earnings
Read Time: approx. 4:31

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Tag This: Mounting fears over the coronavirus outbreak in China continued to weigh on Wall Street this past Friday, with energy, financial and healthcare stocks bearing most of the brunt.

All three major U.S. indexes ended the session in negative territory with the Dow Jones Industrial average clocking in its fourth straight day of losses and the S&P 500 registering its worst performance since October of last year.

Ten-year Treasury yields fell below 1.70% for the first time since November and U.S. oil suffered its biggest weekly fall since May driven by combined fears of oversupply and worries the coronavirus could dampen the demand for crude.

That being said, there were a handful of companies that ended the week on a positive note. Intel reported earnings that beat analyst estimates helping lift shares to their highest in nearly two decades. The chipmaker noted that revenue grew 8% year-over-year and gave optimistic guidance for the first quarter of 2020. American Express also provided an encouraging outlook for the rest of the year after reporting better-than-expected fourth-quarter results. Lastly, Boeing shares closed higher after reports their 737 Max airplane could be recertified before midyear, which would be ahead of schedule. Elsewhere, here’s what you may have missed this past week:

Amazon wants to make your hand your credit card, according to the Wall Street Journal. “The tech giant is creating checkout terminals that could be placed in brick-and-mortar stores and allow shoppers to link their card information to their hands. They could then pay for purchases with their palms, without having to pull out a card or phone.” 

Spotify is in early talks to buy sports and pop-culture outlet the Ringer, according to the Wall Street JournalWhy it matters: the deal would bring the audio streaming giant into broader digital media and add a network of content including “The Bill Simmons Podcast.”

In an editorial for The Financial Times, the chief executive of Google parent company Alphabet on Monday backed an EU proposal to temporarily ban facial-recognition technology because of the possibility that it could be used for nefarious purposes.

According to the Wall Street Journal, “Uber is letting drivers at airports in three California cities charge up to five times the fare Uber sets. The move aims to give drivers more autonomy after a new state law took effect.” The Verge points out that “the new feature effectively creates a bidding system where drivers with lower prices get the first customers. As demand increases, drivers who had set higher prices will be matched with riders, too.”

As first reported by The Guardian, Amazon founder and billionaire Jeff Bezos had his mobile phone “hacked” in 2018 after receiving a WhatsApp message that had apparently been sent from the personal account of the crown prince of Saudi Arabia. Details: “The encrypted message from the number used by the Crown Prince, Mohammed bin Salman, is believed to have included a malicious file that infiltrated the phone of the world’s richest man.”

Despite potential economic risks associated with the virus outbreak in China, technology companies helped both the S&P 500 and Nasdaq Composite indexes rebound on Wednesday, with the Dow Jones Industrial Average finishing slightly lower. IBM specifically lifted markets higher after reporting growing revenue last quarter after five quarters of declines. Shares of Apple were also up after a report that the tech giant is preparing to launch a low-cost iPhone later this year. On the economic front, U.S. home sales jumped to their highest level in nearly two years in December. The demand was driven by low mortgage rates and millennials who are aging into their homebuying years.

Tesla became the first publicly listed U.S. automaker to cross $100 billion in market valuation, more than Ford and General Motors combined. Yahoo Finance noted that the market value also climbed above Volkswagen’s for the first time and could “trigger a huge payout for Elon Musk if he can sustain the feat for months.” 

Amazon said its music streaming service had over 55 million customers globally bringing it closer to Apple Music but far behind Swedish rival, Spotify.

U.S. stock indexes initially moved lower on Thursday morning, driven by fears surrounding the coronavirus outbreak in China. After Beijing decided to lockdown Wuhan, where the virus originated, as well as several neighboring cities, investors were forced to reassess the potential economic fallout world-wide. Airlines listed in Hong Kong and Shanghai fell on the newsCrude oil prices also slid which then dragged some energy stocks lower. The knock-on effect also impacted hotel and casino shares like Wynn Resorts, which draw a fair amount of their revenue from China. 

That being said, in the afternoon stocks rebounded slightly after the World Health Organization announced it was too early to label the virus a “public health emergency of international concern.” This statement, along with a mixed bag of earnings results, helped push shares higher into the closing bell. While the Dow Jones Industrial Average ended slightly in the red, the S&P 500 and Nasdaq Composite Indexes notched modest gains, capping off a mixed day on Wall Street.