News out of China captured investors’ attention after a three-day weekend, with stocks opening lower in the stock market today. The four-day trading week revved up on Tuesday, with the S&P 500 opening lower, before regaining its footing as bulls bought the morning dip.
Ultimately, the SPDR S&P 500 ETF (NYSEARCA:SPY) finished lower by 0.2%. But just because investors were nibbling the Tuesday morning dip, doesn’t mean the situation in China is under control.
What Is Coronavirus?
While still relatively small, the growth rate for this new coronavirus strain — 2019 novel coronavirus, or 2019-nCoV — is worrying observers. So far the virus, which presents as flu, cold and pneumonia-like symptoms, has been limited to Asia and was originally thought to only be transmitted from animals to humans.
That was the case, but on Monday, Chinese scientists confirmed that this strain is spreading from human to human, and on Tuesday afternoon, stocks slipped back to the morning lows on reports that there has been a reported case in the U.S., in Washington state.
Over the weekend, the number of coronavirus cases quadrupled, with more than 200 reported cases. There has now been six confirmed deaths, while most of the cases have been popping up where it originated, in Wuhan. However, cases have been reported in Beijing, Shanghai and Shenzhen, as well as Japan, Thailand and South Korea.
Making matters worse is the Chinese New Year, which kick starts a multi-week celebration where many in the country take to traveling. Given how easily the virus seems to be spreading, it has many worried, including the World Health Organization.
Movers in the Stock Market Today
Uber (NYSE:UBER) ripped higher on Tuesday, climbing over 7% as the company announced the sale of its food-delivery unit in India. The company will sell the business to Zomato, a local rival, and retain a 9.99% equity stake in the business. The move is part of Uber’s continued to push to turn profitable.
Beyond Meat (NASDAQ:BYND) stock exploded higher Tuesday, adding 18.4% on news of more potential growth. The idea of Beyond Meat gaining ground in China has investors excited, but so too do the reports that Starbucks (NASDAQ:SBUX) is looking to add plant-based food options to its menu.
While SBUX did not say it would use Beyond Meat, the possibility has shares rallying.
The trade-war tensions with China have cooled, and tensions with France are chilling too. Or at the very least, being pushed off. The two nations have agreed to disagree on France’s digital tax — until the end of the year. The law aimed to levy a 3% tax on digital revenues, adding up to a large sum when considering companies like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Facebook (NASDAQ:FB) and others in mega tech.
Similarly, the U.S. has agreed to postpone its retaliatory tariffs. Those tariffs were up to 100% on $2.4 billion worth of goods.
While the bull market rages on, McDermott (NYSE:MDR) isn’t feeling the love. The company filed for Chapter 11 bankruptcy on Tuesday morning, and should delist from the New York Stock Exchange within the next 10 days. Shares will then trade over-the-counter throughout the rest of the Chapter 11 process.
Boeing (NYSE:BA) shares continue to slip, shedding more than 5% at one point on Tuesday thanks to reports that the 737 Max likely won’t return until at least June or July. The move sent shares below range support.
On the flip side, Boeing’s new 777X gears up for its first test flight this week. The 777X is Boeing’s largest twin-engine plane and management plans to begin delivering the plane in 2021. If the 777X can avoid further delays, it may give BA a much-needed boost, even if only for sentiment purposes.