Amid mounting coronavirus fears, Wall Street went into a sell-off frenzy today, causing the Dow Jones Industrial Average to end the day down 1,031 points (3.56%).
The selling led to Wall Street’s worst day in the past two years and wiped out the Dow’s gains for the year; it’s now down 2% for 2020. Other benchmarks similarly slid: The S&P 500 dropped by 3.35%, while the Nasdaq Composite closed down 3.71%. The steep fall across the board was driven by the increased spread of the coronavirus outside China, which traders worry could spark a prolonged international economic slowdown.
Major footwear players were not immune to the overall market losses. Tapestry Inc., Designer Brands Inc. and Skechers USA Inc. were among the companies to see sizable declines throughout the day. Coach, Stuart Weitzman and Kate Spade parent Tapestry ended the trading day down 8.72% , while DBI closed down 8.07% and Skechers shares dropped by 7.45%.
Shoe Carnival, Inc. and Steve Madden, Ltd. saw more modest losses by comparison to others in the shoe space, with shares dropping by 3% and 2.51%, respectively, at the end of the trading day.
More than 79,500 cases of coronavirus have been confirmed worldwide, and more than 2,600 people have died from the virus. While the outbreak has mostly been contained to mainland China, after originating in the central Chinese city of Wuhan, confirmed cases outside the country rose significantly on Monday.
South Korea reported 231 new cases on Monday local time, bringing its total to 833 infected and seven dead. Italy is grappling with the largest outbreak outside Asia, as officials on Monday reported 229 cases and six deaths, and Iran’s government confirmed 61 cases and 12 deaths on Monday.
In response to coronavirus, many fashion and footwear firms with operations in China, including Nike, Skechers and Tapestry, have chosen to shutter outposts or reduce operating hours in heavily infected areas. This has led to lower sales, which could negatively impact the companies’ fiscal year bottom lines. Restrictions on outbound travel in China have also slowed manufacturing and production time lines, at a time when workers have been delayed in returning to factories and corporate offices.
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