How health scares impact the market

White House considers ban on China flights amid coronavirus outbreak

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With the stock market still hovering near record highs, it doesn’t take much for traders to get nervous. This explains some of the recent sharp selling sparked at least in part by anxiety over the spreading coronavirus within China and to other countries.

The roughly 1.5% tumble on Jan. 27 was the steepest down day for U.S. stocks in almost half a year. It coincided with news reports that companies from Disney and Starbucks to Ford and Apple were closing stores, suspending business travel or otherwise slowing or halting operations in affected areas of Wuhan, center of the outbreak, and other Chinese cities. Carriers such as British Airways have curtailed flights. The market lost more ground Jan. 31 amid rising health warnings.

The outbreak could remain in the news for months, if not longer, creating more market jitters.

The China angle is significant given the country’s expanded trade ties and supply-chain connections with the U.S. and other Western nations. But while the headlines are worrisome, and societal health risks elevated, history suggests that the virus won’t have a lasting influence on the investment backdrop.

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By Bernice Caldwell

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