EDITOR'S NOTE

Well, that was a disappointing way to end the first month of the year. Stocks closed out January with a major sell-off, as the Dow Jones Industrial Average fell more than 1% along with the S&P 500 and Nasdaq Composite.

The culprit for the sell-off was the coronavirus and growing fears over how it will impact the global economy. Friday’s drop was so steep it erased 1% monthly gains for the Dow and S&P 500. Both indexes also snapped five-month winning streaks. 

In this edition of the Weekend Brief, CNBC’s Michael Santoli writes about what damage the drop has done to the bull trend and analyzes the health of the market at this point.

The bad news for investors is three-fold. First, the coronavirus fears are not going away anytime soon. The number of confirmed cases and deaths keeps rising while airlines — including United and Delta — suspend flights between China and the U.S. Heading into next week, the emergence of the coronavirus could continue to be the biggest catalyst for stocks, CNBC’s Patti Domm writes.

Second, February is a notoriously tough month for stocks. Since 1950, the S&P 500 has averaged just a 0.1% gain in February, according to data from the Stock Trader’s Almanac. That ranks ninth best in terms of average monthly performance for the broad index.

Third, the Democratic primaries are kicking off this month with Sen. Bernie Sanders gaining steam in the polls. Sanders is viewed by many investors as negative for the stock market and is in favor of significantly raising taxes on individuals and companies.

But while the broader stock market took a big hit towards the end of the month, some biotechnology stocks provided a bright spot. These stocks gained steam as investors bet their efforts to find a vaccine or develop drug treatments for the coronavirus will pay off, CNBC’s Yun Li writes. 

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MICHAEL SANTOLI'S MARKET COLUMN

THE WEEK AHEAD

YOUR WEEKEND BRIEFING