US Stocks Slip; China Virus Spreads

(AP) -- U.S. stocks fell in early trading Thursday over heightened fears that the global economy could take a hit as the number of confirmed cases and the death toll from a virus in China spiked.

World health officials expressed "great concern" that the new type of coronavirus is starting to spread between people outside of China, which is essentially on lockdown.

Communications and health care companies led the losses. Facebook fell 6.6% and Anthem fell 1.8%.

Industrial companies also fell broadly. UPS skidded 5.9% after the package delivery company gave investors a disappointing profit forecast.

Most technology companies also fell, though solid earnings from Microsoft, ServiceNow and Lam Research helped the sector reach modest gains.

Concerns about the spread of the coronavirus and its impact overshadowed mostly positive corporate earnings reports. There are currently more than 7,800 confirmed cases, mostly in central China, and 170 deaths, mostly in Hubei province.

Companies are increasingly issuing warnings over the potential impact to profits and revenue. Align Technology, which makes tooth-straightening systems, gave investors a weak profit forecast because of the virus. Starbucks has already held back on raising its forecast for the year and airlines are starting to curtail flights to Chinese cities because of weak demand.

KEEPING SCORE: The S&P 500 index fell 0.4% as of 10:30 a.m. Eastern time. The Dow Jones Industrial Average fell 48 points, or 0.2%, to 28,696. The Nasdaq fell 0.2%. The Russell 2000 index of smaller company stocks fell 0.2%.

OVERSEAS: Markets in Europe and Asia fell. Hong Kong's Hang Seng was hit particularly hard, shedding 2.6%. Japan's Nikkei 225 slipped 1.7%. Markets in mainland China are still closed for Lunar New Year holiday.

CLOUD COMPUTING: Microsoft rose 2.5% after the software maker handily beat Wall Street's fiscal second-quarter profit forecasts on its growing cloud computing business. The company said that revenue from its Azure cloud computing business grew 62% percent. The company is trying to catch up to the leading cloud provider, Amazon, and received a big boost in October from a $10 billion U.S. Department of Defense contract.

FULL CHARGE: Tesla surged 11% after the electric vehicle maker blew past Wall Street's fourth-quarter earnings forecasts on record sales. The company also told investors that it is ramping up production of the Model Y small SUV, which is a key product because consumers are buying smaller utility vehicles.

UP IN SMOKE: Altria slid 5.8% after the maker of Marlboro cigarettes reported a hefty costs because of its investment in e-cigarette maker Juul. Altria took a 35% stake in Juul at the end of 2018 and that company has since faced a surge in federal and state investigations into its marketing amid an explosion of underage vaping teenagers.