Investors remain on edge amid the growing COVID-19 outbreak, which the World Health Organization officially labeled a global pandemic yesterday. All three major stock indexes opened down so sharply that it triggered circuit breakers that halted trading for 15 minutes. That pause didn't stop sellers, and stocks remained under pressure after trading resumed.
The indiscriminate sell-off isn't sparing any sector. Several industrial goods and infrastructure-related companies had tumbled more than 10% by midmorning, including Textron (NYSE:TXT), MasTec (NYSE:MTZ), Interface (NASDAQ:TILE), and Chart Industries (NYSE:GTLS).
Textron continued sliding today as investors grow increasingly concerned about how much a global recession sparked by the COVID-19 outbreak will affect its financial results. The company, which makes business jets, golf carts, and many other industrial goods, will likely feel some impact across its various divisions, starting with those tied to business travel as more companies mandate that their employees work from home.
MasTec is also taking another nasty tumble as the stock market sell-off intensifies. The company, which provides engineering, building, and maintenance services to the communications, energy, and utility sectors, is under pressure due to more weakness in the price of oil following Monday's historic crash. That sell-off in the oil market forced oil companies to immediately reduce their drilling activities, which will result in them completing fewer wells this year. This slowdown will lessen the need for new pipelines and other infrastructure that MasTec builds for the industry.
Carpet maker Interface is also tumbling today on fears of how the COVID-19 outbreak might affect its operations. With economic conditions likely to start deteriorating, people may delay renovation projects, such as installing new carpet, which could hurt Interface's sales.
Finally, Chart Industries is enduring another brutal day. The company, which makes natural gas processing and storage equipment, will likely take a hit from plunging oil prices. That's because its customers will probably need to delay or cancel projects, lessening the need for the products Chart manufactures.
Investors are unnerved by the uncertainty over what the COVID-19 outbreak might bring. It's already causing damage to many sectors of the economy, like the travel industry and the energy sector. That impact has the potential to trickle down to other parts of the economy in the near term.
However, world governments, along with health experts, are racing to stop the spread as well as stem the economic impact. These collective actions will eventually soothe fears and get the economy back up on its feet. In the meantime, investors will likely endure more volatility; it could take some time before we can see the inevitable light at the end of this dark tunnel.