January 21, 2020 / 6:40 PM / a month ago

US STOCKS-China virus outbreak impedes Wall Street rally; Netflix earnings on deck

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* Airlines, travel stocks hit by China virus fears

* Morgan Stanley drops after Citi downgrade

* Halliburton up after profit beats estimates

* Indexes: Dow off 0.08%, S&P down 0.04%, Nasdaq up 0.02% (Updates to early afternoon)

By Sruthi Shankar

Jan 21 (Reuters) - Wall Street’s main indexes paused near all-time highs on Tuesday, as concerns about the fallout from a deadly virus outbreak in China and a downbeat growth outlook from the IMF prompted investors to lock in recent gains.

The developments soured the mood among U.S. investors who had propelled the indexes to record highs last week, encouraged by strong data, the signing of the Phase 1 U.S.-China trade deal and an upbeat start to fourth-quarter earnings.

The tech-heavy Nasdaq, however, hit a record in late morning trade, helped by positive research recommendations on Tesla Inc and Intel Corp.

Netflix Inc was down 1%, while International Business Machines Corp rose 0.5% ahead of results scheduled after markets close.

71% of the 46 S&P 500 companies that have reported results so far, have topped Wall Street’s profit estimates, according to Refinitiv IBES data. However, analysts forecast earnings to have dropped 0.9% in the fourth quarter.

Chinese officials confirmed on Tuesday the new coronavirus outbreak took six lives and that it could spread between humans, stoking fears of a global pandemic and reviving memories of Severe Acute Respiratory Syndrome (SARS) — another outbreak that killed nearly 800 people in 2002-03.

With the virus spreading just ahead of the Chinese New Year holidays, the S&P 1500 airlines index fell 2.6%.

Hotel and casino operators Las Vegas Sands Corp and Wynn Resorts Ltd, both of which have large operations in China, dropped about 4%.

“It’s one of many factors that investors are considering. But I think focus is going to be on earnings season that’s in front of us,” said Gordon Charlop, a managing director at Rosenblatt Securities in New York.

“We’re watching the Davos, impeachment hearings, but at the moment, there’s nothing terribly remarkable about any of those events.”

At 12:59 p.m. ET, the Dow Jones Industrial Average was down 0.08% at 29,325.01. The S&P 500 slipped 0.04% to 3,328.33 and the Nasdaq Composite gained 0.02% to 9,390.69.

Another cause for concern was the International Monetary Fund (IMF) trimming its global growth forecasts for 2020 and 2021, mostly due to a sharper-than-expected slowdown in India and other emerging markets.

Declining issues outnumbered advancers for a 1.42-to-1 ratio on the NYSE and a 1.37-to-1 ratio on the Nasdaq.

The S&P index recorded 85 new 52-week highs and no new low, while the Nasdaq recorded 118 new highs and 31 new lows. (Reporting by Sruthi Shankar and Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)

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