Fashion Falls Further as Coronavirus Fears Shake Stocks
The stock market roller coaster started back up Thursday morning as renewed worries over the impact of a wider coronavirus outbreak sent Wall Street reeling.
The Dow Jones Industrial Average traded down 583.61 points, or 2.2 percent, to 26,373.98 in morning trading as more people looked to the potential economic fallout of the coronavirus, which appears to have slowed in China, but is gaining ground in the West.
Goldman Sachs, expecting the virus to become widespread, predicted companies in the S&P 500 will generate no earnings growth this year.
Fashion is particularly vulnerable given that it is already suffering from a supply chain slowdowns and weak sales in China and would be hit even harder if consumers decide to stay home.
J.C. Penney Co. Inc., which posted sales and earnings declines in the fourth quarter, fell 13.9 percent to 63 cents. Also weathering significant declines were Tailored Brands Inc., 12.3 percent to $2.86; Chico’s FAS Inc., 10 percent to $3.52; Revolve Group, 9.4 percent to $15.21; Macy’s Inc., 8 percent to $12.51; RealReal Inc., 7.2 percent to $13.88; Brunello Cucinelli, 7 percent to 28.72 euros; Gap Inc., 6.5 percent to $13.75; LVMH Moët Hennessy Louis Vuitton, 5.3 percent to 364.75 euros, and Burberry Group, 5.3 percent to 16.60 pounds.
Most markets around the world — from Tokyo to New York — were in retreat. Hardest hit was Paris, where the CAC 40 was down 4.3 percent to 5,441.01.
In the U.S., Goldman Sachs said it expects S&P 500 companies will post earnings per share of $165 this — representing a flat performance versus 2019 and down from prior expectations calling for earnings of $174.
“Our reduced forecasts reflect the severe decline in Chinese economic activity in [the first quarter], lower end-demand for U.S. exporters, supply chain disruption, a slowdown in U.S. economic activity and elevated uncertainty,” Goldman said.
The bank said that while global economic growth is slowing, the U.S. is better positioned than other regions, as companies that have a high-concentration of sales in the U.S. are seen performing better than those that rely more on foreign business.
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