NEW YORK – Stocks around the world fell this week on worries that a new type of virus in China may ultimately hit profits for companies from Wuhan to Washington. The World Health Organization has held off on calling the outbreak a global health emergency but says it may become one.
The coronavirus has killed more than two dozen people and infected more than 800, with the epicenter in the city of Wuhan in central China. The virus can transmit from human to human, which increases its potential spread.
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Why are investors worried?
Past outbreaks of disease have caused sharp losses for stocks, at least temporarily. Stocks in Hong Kong lost about 10% in March and April of 2003 when the number of new SARS cases confirmed was accelerating, for example.
Besides the physical toll of illnesses and deaths, fear of disease can cause people to stop traveling, shopping and eating out at restaurants. Even if the disease stays mostly outside the United States, it can significantly hurt profits for U.S. companies.
China accounted for 6% of all revenue for S&P 500 companies over the past 12 months, nearly double any other country besides the United States, according to FactSet.
“It can have broad impacts well beyond China,” Procter & Gamble CFO Jon Moeller told analysts Thursday.
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