Companies with China ties start to feel virus impact

Companies with China ties start to feel virus impact


NEW YORK (AP) — The dangerous virus spreading through China threatens a wide range of industries with ties to the world’s second largest economy.

Chinese authorities have cut off access to Wuhan, where the virus originated, and 16 other cities to prevent further spread of the virus, affecting more than 50 million people. The financial and economic hub of Hong Kong has cut all rail links to the mainland.

Many of the world's largest companies rely on Chinese consumers for revenue and factories for supplies. For example, Apple CEO Tim Cook said the virus outbreak has already caused some of Apple's suppliers in China to delay reopening their factories until Feb. 10 and some stores selling products already have temporarily closed or reduced their operating hours.

“The situation is emerging and we're still gathering lots of data points and monitoring it very closely," Cook said.

The virus could shave as much as 1.2 percentage points off China’s economic growth, according to “a back of the envelope calculation” by S&P Global Ratings last week. The International Monetary Fund earlier this month issued a forecast for 6% growth for China in 2020.

Airlines proved to be the most visible barometer of fear as the virus spread. America Airlines has cut back some flights to Shanghai and Beijing because of lower demand. It's shares, along with Delta Air Lines and United Airlines Holdings, lost ground as reports of new cases surfaced. The industry had been seeing a strong demand for travel, which pushed up prices and left fewer empty seats.

Resorts, including Wynn and Las Vegas Sands slumped as the virus forced travelers to cancel trips to the gambling haven of Macao. Both companies get the majority of their revenue from China.

Technology companies, especially...

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