Published: Tue, February 04, 2020
Markets | By Otis Pena

Futures point to rebound as China seeks to curb virus impact

Futures point to rebound as China seeks to curb virus impact

The Dow Jones Industrial Average closed down 603.41 points, or 2.09 percent, to 28,256.03.

The S&P 500 posted 24 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 54 new highs and 66 new lows. The Nasdaq Composite was up 126.00 points, or 1.38%, at 9,276.93.

Futures up: Dow 0.34%, S&P 0.40%, Nasdaq 0.43%.

US stocks are expected to start the week on a positive note, following Friday's heavy sell-off, which saw the Dow and the S&P 500 register their biggest weekly percentage losses since August as coronavirus outbreak escalated. Markets don't pay it much attention until it becomes inverted, a relatively rare occurrence that happens when short-term Treasurys offer higher yields than longer-term Treasurys.

Microsoft shares rose 2.0%, leading a 1.0% rise for the S&P 500 technology sector.

The Russell 2000 is down 36.26 points, or 2.2%.

General Motors and Merck will report financial results on Wednesday.

"Investors are looking beyond the potential negative impacts of the coronavirus", said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

Stocks in China plunged overnight on the first day back after Lunar New Year celebrations. "You may continue to see sort of reallocation".

Chinese authorities have quarantined millions of people to contain the virus, which has infected more than 17,000 people and has been linked to more than 360 deaths.

Delta Air Lines lost 2.38 per cent and American Airlines fell 3.17 per cent after the companies said they would suspend all flights to mainland China. The 30-stock index notched its worst day since August. But the move had been largely expected because Chinese markets closed just as the outbreak was beginning to draw widespread attention. Democrats in Iowa kicked off the party's nominating process on Monday.

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Shares edged higher in Europe on relief the United Kingdom finally exited the European Union, while US stocks advanced as data showed factory activity unexpectedly rebounded in January after contracting for five straight months amid a surge in new orders.

The U.S. manufacturing gauge from the Institute for Supply Management is due Monday. A manufacturing reading in the US topped estimates.

In company news, Tesla Inc shares soared 19.9 per cent as Panasonic Corp reported the first quarterly profit in its U.S. battery business with the electric vehicle maker.

Gilead Sciences climbed $3.16, or 5%, to $66.36.

The number of coronavirus cases worldwide rose to over 10,000 on Friday, with 213 people killed in China.

Nike (NKE) jumped 3.1% after analysts at UBS and JPMorgan recommended purchasing shares on irus-related weakness. Slumping oil prices also weighed on Exxon, making it the second-worst performer in the Dow on Monday.

Oil prices fell. Brent crude slid $1.26 to $55.36 a barrel.

"These initial interventions aim to boost confidence, but they are unlikely to be sufficient to curtail a sharp downturn in Q1", Citi economists said in a note.

Friday has the US employment report for January.

The pan-European Stoxx Europe 600 gained 0.2%. "We don't have the all-clear yet", Lerner said.

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