By Yasin Ebrahim
Investing.com – Wall Street is on pace to snap two-week winning streak Friday, as an upswing in the number of coronavirus infections flagged concerns about global growth and forced traders to rein in their bullish bets on stocks for the second-straight day.
The S&P 500 slipped 0.83%, the Nasdaq Composite lost 1.51% and the Dow Jones Industrial Average fell 0.72%.
More than 800 new Covid-19 cases were reported in China overnight, taking the total to 75,000 confirmed cases and the death toll above 2,000. Outside mainland China, meanwhile, infections continue to rise. South Korea recorded 100 new cases, six cases were confirmed in Italy and the World Health Organization said Iran now has its first case of the disease.
The rise in infections renewed fears of a coronavirus pandemic, forcing investors to ditch chip stocks amid concerns about a prolonged disruption to supply chains in China, the world's factory.
Advanced Micro Devices (NASDAQ:AMD), Nvidia (NASDAQ:NVDA) and Micron Technology (NASDAQ:MU) led the selloff in tech, with Microsoft (NASDAQ:MSFT) and Salesforce.com (NYSE:CRM) also adding to downside momentum.
And the selling may intensify heading into the close amid uncertainty over the weekend, Scotiabank warned.
"There is the risk that markets could shed more risk into the close given uncertainty ahead of weekend developments and that wouldn’t be terribly unusual given the Friday patterns for some time now."
The impact of the virus was also flagged in the latest U.S. services sector, which saw activity fall to its lowest in six years, according to IHS Market.
The positive backdrop for corporate earnings offered little respite.
Dropbox (NASDAQ:DBX) surged 21% as CEO Drew Houston said the company would turn a profit by the end of the year, following better-than-expected fourth-quarter results.
Deere (NYSE:DE), meanwhile, climbed 8.7% after topping estimates on both the top and bottom lines, with CEO John May touting optimism that weakness in in the U.S. farm sector was reaching a bottom.