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March 19, 2020

Greater Hartford company stocks shed 41% of value since U.S. coronavirus outbreak

Greater Hartford publicly traded companies’ stock prices have taken a beating in recent weeks, collectively losing close to half their value, as concerns over the spread of coronavirus haunt Wall Street.

The 14 publicly traded companies headquartered or with major operations in Greater Hartford have collectively lost 41% of their stock value over a nearly two-month period starting Jan. 21 (the date of the first U.S. confirmed coronavirus case), to Wednesday’s market closing, a Hartford Business Journal analysis of stock prices has found.

No local industries are being spared in the market sell off, as the spread of COVID-19 in Connecticut, and around the country and world has paralyzed the global economy.

Manchester-based Lydall, a global manufacturer of specialty engineered products for the thermal/acoustical and filtration/separation markets, has seen the steepest decline locally, with its stock price retreating nearly 70% since Jan. 21, from $22.04 to $6.79 at the market’s closing Wednesday.

Waterbury regional lender Webster Financial Corp.’s stock price has declined 61% since Jan. 21, closing Wednesday at $20.19.

Property casualty insurer The Hartford saw the third biggest decline -- 56.6% -- as its stock closed Wednesday at $26.25 down from $60.49 Jan. 21.

Overall, Wednesday was another bad day on Wall Street as U.S. stocks ended the session deep in the red.

The Dow closed down 6.3%, or 1,338 points, and has now erased most of its gains accumulated under the Trump administration.

The S&P 500 is also edging closer to falling below its January 2017 level. The index finished down 5.2%. The Nasdaq Composite closed down 4.7%.

Trading was briefly halted during the early afternoon after the S&P fell 7%, thereby triggering the New York Stock Exchange's circuit breaker.

There is a lot on investors' minds right now: expected recessions around the world, lower demand for energy and goods, and liquidity worries in financial markets.

Economists predict recessions for both individual countries and the world economy this year as the pandemic dealt both a supply and demand shock to commerce. That said, expectations for a sharp rebound for the economy and the stock market towards the second half of the year are high.

Despite the Trump administration’s proposed $1 trillion economic rescue package to combat the fallout from the coronavirus pandemic that was announced Tuesday, investor sentiment continued to deteriorate.

Many Greater Hartford companies haven’t yet said much to their investors about how COVID-19 will impact earnings, but the earliest warnings appear to be in the manufacturing sector. 

Lydall, noting its reliance on foreign operations, cited coronavirus as a risk in a Feb. 26 filing, saying it expected a negative impact to its first quarter earnings.

“The impact of the coronavirus on the company’s businesses is uncertain at this time and will depend on future developments, but prolonged closures in China may disrupt the company's operations and the operations of suppliers and customers,” it said.

Meanwhile, on Feb. 21, New Britain’s Stanley Black & Decker noted the outbreak in China and elsewhere. 

“The extent of the outbreak and its impact on the company's operations is uncertain,” Stanley said. “A prolonged outbreak could cause interruptions to the company's operations and its customers and suppliers. “

Beyond that, it’s clear companies are taking social distancing precautions.

Recent SEC filings show that at least three area companies -- Cigna, Lydall and Webster -- may hold shareholder or board meetings virtually rather than in person.

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