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US stocks retreat amid China virus worries; pound gains as rate cut bets dim

➤ S&P 500 retreats from Friday's record high; Netflix, IBM to report earnings.

➤ Treasurys rally, dollar slips.

➤ Officials say China virus is contagious.

➤ Markets trim BoE rate cut bets after UK jobs data; pound gains

Wall Street retreated from Friday's record high after resuming trading after the Martin Luther King Jr. holiday, amid global growth concerns and worries about the impact of a virus in China.

S&P 500 fell 0.3% around 9:39 a.m. ET, with Netflix Inc. and International Business Machines Corp. scheduled to report earnings today. The S&P 500 closed at a record high of 3,329.6 on Friday.

The International Monetary Fund cut its global growth forecasts through 2021 as it said the global outlook remained "sluggish." A poll by PricewaterhouseCoopers showed more than half of the 1,581 CEOs surveyed project a slowdown in 2020, with business confidence declining to the lowest level since 2009.

Six people have died because of the new coronavirus in China, with officials saying that the virus is contagious. Shares of airlines, cinemas and restaurant operators declined in China amid concerns that people could scale back travel plans for the Lunar New Year holiday if the situation worsens.

That means "safe-haven and defensive sectors might outperform the riskier assets in the days to come," Margaret Yang Yan, market analyst at CMC Markets Singapore, wrote.

In Europe, the Stoxx Europe 600 index declined 0.3%. UBS Group AG declined 4.7% after the bank missed key 2019 targets.

Germany's DAX was flat and France's CAC 40 shed 0.7%. French Finance Minister Bruno Le Maire said discussions with the U.S. over digital taxation "remained difficult" as the two sides reached a tariff ceasefire in relation to a dispute over digital taxes. The FTSE 100 declined 0.7%.

In Asia, the Hang Seng index slumped 2.8% after Moody's downgraded Hong Kong. The Shanghai SE Composite lost 1.4% and Japan's Nikkei 225 fell 0.9%.

Among bonds, the yield on 10-year Treasurys lost 3 basis points to 1.794%, while that on German Bunds with the same maturity fell 1 basis point.

In currencies, sterling gained 0.4% against the dollar as U.K. employment rose to a record high and wage growth defied expectations for a slowdown, dimming the chances of a rate cut by the Bank of England on Jan. 30.

The dollar index fell 0.2%, ahead of U.S. President Donald Trump's impeachment trial in the U.S. Senate later today.

The euro gained 0.1% as the ZEW institute's survey showed German economic sentiment hit the highest value since July 2015. The onshore Chinese yuan lost 0.5%.

The Japanese yen rose 0.1% as the Bank of Japan raised its growth forecast for fiscal 2019 and fiscal 2020, while keeping its monetary policy unchanged, as widely expected.

In commodities, Brent crude fell 0.6% to $64.81 per barrel on the ICE Futures Exchange. Gold fell 0.6%.

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