[New York Close] The 'January Effect' Lost to the New Coronavirus (Comprehensive)

'January Stock Price Rise Predicts Market Boom That Year' Myth
Stock Prices Fall Due to New Coronavirus, Making This Year's Market Outlook Pessimistic

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market collapsed as concerns over the novel coronavirus spread, with the U.S. government announcing a travel ban on China.

On the 31st (local time), the Dow Jones Industrial Average fell sharply by 603.41 points (2.09%) to 28,256.03, the S&P 500 dropped 58.14 points (1.77%) to 3,225.52, and the Nasdaq index declined 148.00 points (1.59%) to 9,150.94.

The Dow experienced its largest drop since August last year due to the novel coronavirus. With this decline, the Dow closed the January session in the red. CNBC expressed concern that the 'January effect,' which typically predicts a rising market for the year if January ends positively, has disappeared.

The safe-haven bond market showed strength. In the U.S. Treasury market, the 10-year yield fell to 1.505%, causing an inversion of the yield curve as it dropped below the 3-month yield. A decline in bond yields means bond prices are rising.

On the same day, the U.S. federal government further strengthened its response to the novel coronavirus. Following the previous day's travel advisory banning travel to China, a public health emergency was declared in the U.S. Foreign nationals who have visited China in the past two weeks were banned from entering the U.S. Major U.S. airlines decided to cancel all flights to and from China for the time being.

Despite the market crash, Amazon's stock attracted attention by rising more than 7% after reporting better-than-expected earnings after the market closed the previous day.

International oil prices also continued to decline amid the novel coronavirus. On this day, West Texas Intermediate (WTI) crude oil for March delivery on the New York Mercantile Exchange (NYMEX) closed down 1.1% (0.58 dollars) at 51.56 dollars per barrel.

International gold prices fell slightly. On the same day, April delivery gold on the New York Commodity Exchange closed at 1,587.90 dollars per ounce, down 0.08% (1.30 dollars) from the previous day.

This content was produced with the assistance of AI translation services.