Wall Street ended the day with only a small advance on Thursday amid fears that efforts to curtail a lethal virus in China could disrupt the slowing global economy.
China announced it would expand its quarantine beyond Wuhan where the virus first appeared.
The unprecedented lockdown of a provincial capital of 11 million people and several other cities showed Chinese authorities are belatedly ramping up efforts to head off a potential pandemic.
So far, the virus has killed 17 and sickened more than 600 in China.
And reported cases in Singapore and Vietnam show that the virus, which causes flu-like symptoms, has jumped national borders.
U.S.-listed tech and industrial companies closed the day up, offsetting drops elsewhere in the market such as for consumer goods makers.
Overnight, China’s CSI300 index lost more than 3 percent while Hong Kong’s Hang Seng surrendered more than 1.5 percent and Seoul’s Kospi gave up 0.9 percent.
Trading screens on Thursday glowed red as losses spread to European markets and the United States.
“This disruption comes at a time when Chinese economic growth already looks fragile and it will unfortunately undo some of the boost in consumer and business sentiment from the China-U. S. trade deal,” said economist Eswar Prasad, former head of the International Monetary Fund’s China unit.
“A broader spread of this disease has the potential to disrupt travel, trade, and supply chains throughout Asia, with knock-on effects on the world economy since Asia is now a key driver of global growth.”
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The Wuhan coronavirus appeared on the eve of the Chinese Lunar New Year, an annual festival that sees hundreds of millions of people travel to their hometowns for family celebrations.
The quarantines already announced — and those that may follow — are certain to dent spending on airlines, railways, hotels, restaurants and other parts of the consumer sector that Chinese officials have been seeking to develop.
“This couldn’t have come at a worse time,” said Jorge Guajardo, former Mexican ambassador to China.
Previous health scares offer reasons for investor concern, at least in the short-run. In 2014, an Ebola outbreak in West Africa knocked U.S. markets off course as investors worried about a chilling effect on consumer spending.
The Dow fell nearly 7 percent between mid-September and mid-October that year.
Likewise, in 2003 as Chinese authorities struggled to curb the fatal Severe Acute Respiratory Syndrome, or SARS, virus, the MSCI China index plunged by more than 10 percent.
SARS ultimately was responsible for the deaths of 774 individuals worldwide, according to the Centers for Disease Control and Prevention.