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Amid coronavirus fears, stocks of Maryland-based companies plunge with broader market

Maryland companies’ stocks plunged along with the rest of the market this week as investors worried about the uncertainty of coronavirus and its impact on the economy.

A selloff in the stock market since Monday was triggered by increasing fears that the U.S. could experience the business, travel and daily life disruptions seen in China and elsewhere around the globe. And Maryland-based companies were not immune to the losses.

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The S&P 500 index fell 11.5 percent for the week, the worst performance in a week since the 2008 financial crisis. Most large public companies in the Baltimore region saw drops ranging from 7% to nearly 16%.

“There is a lot of uncertainty,” said David I. Kass, a clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business. “No one knows the degree that Americans or any company will be affected. ... There’s concern over, ‘How bad will this get?’ and ‘When will it end?’ "

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Baltimore-based Under Armour was among the first companies to discuss an adverse impact from the shuttering of factories in China, where 600 of its stores have closed. The sports apparel maker said earlier this month it expects a $60 million sales hit in the first three months of the year and possible interruptions in production and delays in shipments and sourcing of fabric, trim and packaging. In the past five days, shares of Under Armour fell 7.2% to $14.19 Friday.

And in late January, Hunt Valley-based McCormick & Co. had warned of an unknown impact on operations in China, the spice maker’s second-largest market and site of three plants, including one in Wuhan, where the virus first appeared before spreading and sickening more than 80,000 people worldwide. On Friday, shares of McCormick were down 9.6% to $146.19 each.

“Now it seems every company is mentioning that this coronavirus could have adverse consequences on their numbers,” including Apple, Microsoft, Hasbro and Mattel, said Jonathan P. Murray, managing director of UBS Financial Services in Hunt Valley. “It seems the selling this week has been indiscriminate; almost everything has sold off here in equities.”

Another factor driving selling that has led this week to the market’s fastest 10% drop in history could be the rise of algorithmic trading, or use of automated programmed trading instructions to trigger hundreds of thousands of sell orders, Murray said.

Kass said he believed the market sell-off to be an overreaction.

“Most stock investors, I recommend, be long term,” he said. “Short-term traders and speculators I can see being concerned. I believe the coronavirus probably will be resolved for the most part in a year," after more medical interventions are developed and available. “The economy will start recovering and so would the stock market.”

So far, no coronavirus cases have shown up in Maryland, where two people have tested negative and three more are undergoing testing. In the U.S., 62 people have tested positive for the virus.

Kass said Maryland companies’ stock sell-offs, in line with the broader market, show “the market believes that they’re not any more vulnerable to the coronavirus than the rest of the economy on average."

One exception this past week was Legg Mason, which announced last week that California-based mutual fund giant Franklin Templeton will acquire it for $50 per share in a $4.5 billion deal. Legg Mason’s shares fell just .9% to $49.82, possibly reflecting the acquisition price of $50 per share, a premium of $9.28.

Local firms’ performance

Some of the region’s largest companies ended Friday with shares down at least 7% in the past week, including:

Chemical maker W.R. Grace & Co., down 8% to $56.56 per share.

Money management firm T. Rowe Price, down 10.9% to $118.

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Tenable, a Columbia cybersecurity firm, down 7.7% to $24.52.

Hunt Valley broadcaster Sinclair Broadcast Group Inc., down 15.9% to $23.21.

Corporate Office Properties Trust, down 14% to $25.34.

Williams Scotsman, a modular space supplier, down 7% to $17.54.

Laureate Education, international higher education company, down 9.1% to $18.70.

Colfax, an industrial technology company, down 10.3% to $33.47.

Ciena, a Hanover-based networking services firm, down 9.7% to 38.45.

Medifast, a weight loss company, down 9.4% to $83.11.

Omega Health Care Investors down 11.4% to $39.60.

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