Facebook Inc <FB.O> fell 7.4% in premarket trading after the
social media giant said growth would continue to slow as its
business matured and it reported a surge in quarterly expenses.
The flu-like virus, which originated in China and has spread to
over 15 countries, has disrupted global travel and caused
several companies to suspend operations in China, sparking a
sharp sell-off in financial markets on fears of the inevitable
hit to growth in the world's No. 2 economy.
The World Health Organization's Emergency Committee is due to
reconvene on Thursday to decide whether to declare the virus a
global emergency.
"The economic impact on China hinges on the ability of the
Chinese government to contain the virus and its policy actions
to mitigate the impact," Rabobank analysts wrote in a note.
"Even if the virus outbreak turns out be comparable to SARS, its
global economic effects are likely to be larger than in
2002/2003, as China has a much bigger share in the global
economy nowadays."
In its first estimate of fourth-quarter U.S. GDP due later in
the day, the Commerce Department is expected to report the
economy expanded at a 2.1% annualized rate, falling short of the
Trump administration's 3% annual growth target.
At 7:19 a.m. ET, Dow e-minis <1YMcv1> dropped 191 points, or
0.67%. S&P 500 e-minis <EScv1> fell 22.5 points, or 0.69% and
Nasdaq 100 e-minis <NQcv1> were down 50.5 points, or 0.56%.
The main Wall Street indexes remain on course for their second
weekly decline, despite relatively upbeat fourth-quarter
earnings reports.
Overall, analysts expect profit for S&P 500 companies to be flat
in the fourth quarter versus a 0.6% decline estimated at the
start of the season, according to Refinitiv data.
Microsoft Corp <MSFT.O> gained 3.3% after it reported quarterly
sales and profit above Wall Street expectations, driven by
acceleration of Azure cloud computing revenue growth.
Tesla Inc shares <TSLA.O>, which have surged about 39% this
year, jumped 11.6% gain after the electric carmaker posted its
second quarterly profit in a row as vehicle deliveries hit a
record.
(Reporting by Sruthi Shankar in Bengaluru)
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