Coronavirus Has Material Impact on Earnings

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as coronavirus has material impact on earnings. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Dow futures fall after Microsoft issues coronavirus warning, Trump news conference ahead

U.S. stock futures traded slightly lower on Wednesday night after Microsoft warned it will not meet its revenue guidance for a key business segment, citing the recent global coronavirus outbreak. President Donald Trump is also scheduled to hold a news conference at 6:30 p.m. to address coronavirus concerns in the U.S.

The S&P 500 (SPY) dropped -4.42% today. All 11 sectors lost at least 3% on the day. Energy (XLE), real estate (XLRE) and technology (XLK) led the market down each with losses of more than 5%. Consumer discretionary (XLY), consumer staples (XLP), financials (XLF), materials (XLB) and utilities (XLU) each lost more than 4%. Communication services (XLC), healthcare (XLV) and industrials (XLI) each lost more than 3%.

The Dow Jones index sank a whopping -1190 points (-4.42%) to close at 25,766. The Nasdaq plummeted also losing -414 points (-4.61%) to settle at 8,566.

Coronavirus Has Material Impact on Earnings

Stocks continued their steep decline Thursday as many companies and analysts issue warnings that the coronavirus will have a material impact on earnings.

Thursday’s losses put the Dow, S&P 500 and Nasdaq in correction territory, which is defined on Wall Street as down more than 10% from their a recent high. It took the Dow just 10 sessions to tumble from its all-time high into a correction. The S&P 500 and Nasdaq set record highs last week. The Dow now sits more than 12% below its all-time high.

The CDC confirmed on Wednesday evening the first U.S. coronavirus case of unknown origin in Northern California, indicating possible “community spread” of the disease. The patient had no travel history or contacts that would have put the person at risk, the CDC said. On Thursday, California Gov. Gavin Newsom said the state is monitoring 8,400 people for coronavirus.

Microsoft said Wednesday it will not meet its revenue guidance for a key segment. It said its supply chain is “returning to normal operations at a slower pace than anticipated,” which led the tech giant to cut its forecast for its personal computing division. Personal computing accounted for 36% of Microsoft’s overall revenue during the previous quarter. Microsoft shares were down 7.1%. PayPal also issued a warning about its outlook.

Goldman’s bearish call

“US companies will generate no earnings growth in 2020,” David Kostin, Goldman Sachs’ chief U.S. equity strategist, said in a note that further spooked the market on Thursday. “Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty.”

Key Takeaways…

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P movers (the whole market today).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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2/26/20

S&P 500 Sector Graph

Coronavirus Has Material Impact on Earnings

S&P 500 (SPY)

Coronavirus Has Material Impact on Earnings

Communication Services (XLC)

Coronavirus Has Material Impact on Earnings

Consumer Discretionary (XLY)

Coronavirus Has Material Impact on Earnings

Consumer Staples (XLP)

Coronavirus Has Material Impact on Earnings

Energy (XLE)

Coronavirus Has Material Impact on Earnings

Financials (XLF)

Coronavirus Has Material Impact on Earnings

Real Estate (XLRE)

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

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