Stocks pull back as China bars travel to Hong Kong

Bloomberg

European stocks erased gains while US index futures trimmed an advance as China restricted travel to Hong Kong in the latest international effort to curb the Sars-like virus from spreading. The yuan fluctuated and Treasuries turned higher.
The Stoxx Europe 600 Index gave up an early advance after Hong Kong Chief Executive Carrie Lam said China will stop individual travellers to the territory while closing some border checkpoints and restricting flights and train services from the mainland.
Contracts on the three main American equity indexes clung to moderate gains. Earlier in Asia, Japanese shares fell for a second day and equities slumped in South Korea as that market reopened after holidays. Trading is scheduled to resume in Hong Kong on Wednesday; the latest guidance from China, where the outbreak is still concentrated, is for markets to reopen on Monday.
The offshore yuan fluctuated after a sharp slide the previous day while the yen nudged higher for a sixth session. Crude oil declined. While China reported a further increase in both the death toll and number of infected people from the virus, its top securities regulator encouraged investors to evaluate the impact of the deadly coronavirus “rationally and objectively”.
Investors are keeping an eye out for a slew of earnings due this week while also monitoring the impact of the deadly coronavirus. Even as containment efforts intensify, the likelihood of the virus disrupting global businesses and the world’s second-largest economy appears to be growing.
“Risk appetite is unlikely to improve until we start getting news that the virus is under control,” DBS Group Holdings Ltd strategists Philip Wee and Eugene Leow wrote in a note.
The outbreak shattered a calm in markets that hadn’t seen a 1% up-or-down move in the S&P 500 since early October. The latest surge in demand for havens also sent bond yields tumbling, with the global supply of notes with negative rates surpassing $13 trillion, to the highest since November.
Earnings are due on Wednesday from GE, Boeing and Facebook; Samsung Electronics, International Paper, Unilever and Shell report on Thursday, followed by South Korean chip maker SK Hynix, Chevron, Caterpillar and Exxon Mobil all on Friday.
Fed policy makers on Wednesday are expected to open 2020 the same way they closed 2019 — by holding interest rates steady.
The BOE meeting is highly anticipated on Thursday after a series of dovish comments raised speculation policy makers could lower interest rates.
The UK is scheduled to leave the European Union on Friday.
The Stoxx Europe 600 Index was little changed at 10:03 am London time. Futures on the S&P 500 Index climbed 0.3%. South Korea’s Kospi index sank 3.1%. The MSCI Emerging Market Index dipped 0.7%.
The Bloomberg Dollar Spot Index was little changed. The British pound sank 0.2% to $1.303. The euro was little changed at $1.1018. The Japanese yen strengthened 0.1% to 108.84 per dollar. The offshore yuan appreciated 0.1% to 6.9819 per dollar.
The yield on 10-year Treasuries dipped three basis points to 1.58%. Germany’s 10-year yield decreased one basis point to -0.40%. Britain’s 10-year yield fell one basis point to 0.501%.
Gold weakened 0.2% to $1,579.08 an ounce. Iron ore declined 2.9% to $82.70 per metric ton. West Texas Intermediate crude dipped 0.4% to $52.91 a barrel.